13 Ways Interest Rate Changes Can Impact Your Business Decisions"

How did a specific interest rate change impact a major business decision you were involved in?

The last time rates fell by only half a percentage point, I hastened the purchase of a multifamily property on the Des Moines south side. The numbers penciled out for the original loan, but it was a tight set of financing terms — and if there was ever any trouble with cash flow, they had practically no margin to cover errors. That slight drop in the interest rate lowered monthly debt service by enough to get renovations and repositioning done without taking unnecessary risk. We were able to remodel units, upgrade flooring, and add design elements that appealed to nicer tenants. An almost breakeven purchase became a successful, income-producing investment due to the timing of that move in rates.

What's one lesson you learned that others could benefit from?

The lesson is that shifts in interest rates don't just affect affordability; they change strategy. A rate decrease could be a sign that it's time to step on the accelerator, but a rate increase can just as easily suggest concentrating on holding and improving what you already have rather than adding to it. I have to convey to clients and partners in Des Moines that a tenth of a percentage point is not abstract — it can be the difference between a project penciling out or collapsing under debt service. The general lesson is to always structure offerings based on assumptions of different interest rates. If a project only works under the best-case conditions, then it's not a project you should do.

A couple of years back, when interest rates suddenly went up, I had to rethink my plan to move my educational toy company into a bigger space. At first, it felt like the right time to grow: parents were asking for more of our screen-free kits, and demand was strong. But with higher borrowing costs, every step forward would have carried more risk. I realized that jumping in too quickly could hurt us down the road. It felt a lot like a parenting choice: when your child wants to join every sport or activity, but you know adding too much at once could leave them tired and stressed. Just because something seems exciting right now doesn't mean it's the best move for long-term growth. Kids, like businesses, need space to grow at the right pace.

By waiting, I was able to find better solutions that didn't rely on loans. Instead, we put our energy into making our toys safer and more thoughtfully designed. That decision ended up building stronger trust with parents and made our products even better. It's similar to teaching a child to brush their teeth well before letting them handle floss: laying the foundation first makes everything else easier later. For parents, the lesson is clear: growth doesn't have to be rushed. Whether it's your child's schedule, their learning, or your own decisions, sometimes slowing down and focusing on the essentials leads to stronger results. In the long run, patience often helps kids and families thrive in healthier ways.

When interest rates shift, so does our entire playbook at Uncle Tex Buys Houses.

In Dallas-Fort Worth, where growth is rapid, the traditional 30-year mortgage rate drives home buyer psychology.

When rates trend downward, buyers gain confidence and step into the market faster. That is when we price our property flips more aggressively, often aiming higher because we know demand is about to swell.

On the flip side, in the post-COVID period of rising rates, we bought more cautiously and made lower offers, anticipating softer buyer demand.

The lesson is simple: tie offers and acquisitions directly to the trajectory of interest rates. Ignoring this link means missing both risk signals and profit opportunities.

During my time flipping over 700 homes in Las Vegas, fluctuating mortgage rates regularly influenced our investment strategy and purchasing decisions. Rather than delaying acquisitions while waiting for ideal interest rate conditions, we developed a practical approach of evaluating each opportunity based on current rates and our specific investment goals. This methodology proved invaluable as we learned that successful real estate investors make informed decisions using the financial realities of today rather than speculating on potential rate changes. The lesson that has served me well is that waiting for perfect market conditions often means missing valuable opportunities that work even within current constraints.

When mortgage rates jumped a few years ago, I had a young couple who were just about to close on their first home. The higher rates pushed their expected payment up by several hundred dollars a month, and they started questioning whether they could still afford both the house and the right insurance coverage. Instead of walking away from their dream, we sat down and went through their options. By bundling their home and auto policies, we were able to lower their overall costs while still ensuring they had solid protection in place. That moment reminded me how much a single rate change can shake someone's confidence. It's not just about the numbers; it's about the stress and uncertainty families feel when the financial ground shifts beneath them. What made the difference for this couple was having someone walk them through their choices and show them a path forward that fit both their budget and their peace of mind.

They did move forward with the purchase, and to this day, they'll tell me how relieved they are that they didn't let fear stop them. The lesson I took away, and what I share with others, is that when rates or other financial factors change, you need to step back and look at the whole picture: your budget, your coverage, and your long-term goals. With the right guidance, you can adapt without losing sight of what you're working toward.

A sharp rise in interest rates once played a decisive role in shelving an acquisition plan I was advising on. The financing costs suddenly shifted the deal from being accretive to unsustainable, forcing the client to redirect capital toward strengthening internal operations instead of expansion. The lesson I took from that experience is simple but powerful: always model multiple interest rate scenarios, even when rates seem stable. Markets can turn quickly, and having contingency strategies in place protects decision-making from being blindsided by macroeconomic shifts.

Last year, when interest rates jumped, one of our boutique hotel clients in Midtown had to pause their renovation plans. Their financing costs nearly doubled, and suddenly the upgrades they wanted—motorized blackout shades and automated drapery systems—felt out of reach. Instead of scrapping the project, I restructured it, installing in phases so they could manage cash flow while still elevating the guest experience. Guests now enjoy the same luxury touches the hotel envisioned, but the property was able to move forward without overextending. That experience showed me how closely financial shifts can shape design decisions. In New York, clients weigh every investment carefully, and rising rates often decide whether they move ahead now or wait. My team's job isn't just about fabrics or motors; it's about creating a path that makes premium design possible even when budgets are under pressure.

When I started Vogue Window Fashion nearly twenty years ago, I built the business around this idea: when you want high-quality, tailored window treatments, you deserve a partner who can adapt with you. From Park Avenue residences to landmark hotels like The Plaza, our success has come from listening carefully and aligning design with practical needs. The biggest lesson I've learned is that timing and financing are part of the design process, not obstacles to it. When clients see their investment through the lens of long-term benefits—energy savings from solar shades, privacy with automated drapery, or the ease of smart home integration—they understand they're not just buying window coverings. They're investing in comfort, beauty, and value that lasts well beyond today's rates.

A sharp rise in interest rates directly influenced the decision to expand in-house financing rather than rely on third-party lenders. Traditional loan approvals slowed dramatically, and many potential buyers who would have qualified months earlier suddenly faced higher monthly payments they could not manage. Instead of halting sales, we adapted by offering flexible terms internally, keeping payments within reach while still covering costs.

The lesson was that interest rate shifts do not have to stall growth if financing structures remain adaptable. Relying exclusively on external lending ties business success too closely to market fluctuations. Building alternatives, even if they require more management, creates stability and keeps transactions moving. For others, the takeaway is to anticipate how macroeconomic changes affect customers' access to credit and to prepare solutions that reduce that dependency before conditions tighten.

When interest rates spiked last year, I had to pause opening a second office for Revive My Spaces. The financing suddenly became twice as expensive, and it didn't make sense to take on that kind of burden. Instead, I shifted focus and put the money into growing our in-home service team and investing in training. That choice gave us the ability to serve more families in our current area, and it ended up being a much smarter move.

One client really showed me the impact of that decision. She had just moved into her first home with two little kids and felt completely buried by boxes and clutter. Because we had grown the team instead of the office, I was able to send two organizers to her home. By the end of the day, her space was clear, her kids had room to play, and she told me it felt like a weight was lifted. Moments like that remind me why I do this work.

The lesson I learned is that higher interest rates don't have to stop you from growing; they just push you to think differently about what growth really means. Expansion doesn't always mean new real estate; sometimes it's about making your current services stronger, serving your community better, and letting your results speak for themselves.

One of my clients had to decide whether they should still move forward with financing a major email security upgrade. The higher cost of borrowing gave them pause, but once we examined the potential financial loss and reputational damage from a single phishing-related breach, they chose to proceed. A few months later, the system we implemented blocked several targeted spoofing attempts against their executives, saving them from what could have been a very expensive mistake.

What I took away from that experience is simple: rising interest rates can make any investment feel harder to justify, but some decisions can't wait. Cyber threats aren't slowing down just because financing costs more. When you view security as protecting the foundation of your business—trust, operations, and reputation—the investment makes sense, regardless of the interest rate environment.

One of the most impactful experiences I had with interest rate fluctuations was during the early stages of advising a group of foreign investors on establishing a real estate investment company in Turkey. The original plan was to structure the project financing through Turkish bank loans. However, shortly before finalizing the agreements, the Central Bank raised interest rates significantly in response to inflationary pressure.

This sudden policy change made borrowing prohibitively expensive, prompting us to reassess the entire capital structure. As a legal advisor, I had to swiftly adapt the framework of the partnership agreement, redirecting the project toward equity-based financing with staggered capital contributions from shareholders abroad.

The lesson I took from this experience is that legal and business strategies must be built with macroeconomic agility. It's not enough to draft contracts that work under ideal conditions—they must be flexible enough to survive unexpected policy shifts. Since then, I've made it a habit to include fallback provisions and alternative financing structures in all cross-border investment projects I advise.

A rate increase a few years ago led a client to delay a major hardware refresh. Our original proposal to finance new servers became unfeasible when higher rates pushed costs beyond their budget. We adjusted by transitioning them to a hybrid cloud model, which spread costs into predictable monthly expenses and avoided high-interest debt.

This experience showed that IT strategy must consider financial realities such as interest rates. Since then, I have involved CFOs early in the technology planning process. Aligning IT and finance enables the development of creative solutions, even as economic conditions evolve.

Many aspiring leaders believe that to make effective business decisions, they must master a single channel. They often focus on a specific financial report or market trend. However, this is a significant mistake. A leader's role isn't to be a master of a single channel, but to be a master of the entire business.

A specific interest rate change impacted our plans to invest in new equipment. This experience taught me to learn the language of operations. I stopped thinking like a separate finance department and started thinking like a business leader. A business's job isn't just to make a profit; it's to ensure that the company can actually fulfill its long-term goals.

The key lesson I learned was to break out of the "silo" of financial projections. Instead of abandoning the project, we examined the business as a whole. We didn't just report on the higher interest rate; we analyzed the return on investment as it impacted operational efficiency. We demonstrated how the new equipment would improve our supply chain and our ability to scale our marketing efforts, outweighing the increased cost of the loan.

The impact this had on my career was profound. I transitioned from being a good marketing professional to someone capable of leading an entire business. I learned that even the best financial report is a failure if the operations team can't deliver on its promise. The best way to be a leader is to understand every aspect of the business.