Fed interest rate hikes tame inflation but hit small, often diverse, business owners hardest

Women and people of color, who drove pandemic-era business growth, are especially vulnerable to rising costs.


November 6, 2023

Richard Tsong-Taatarii, Star Tribune

Monica Birrenkott, in Shakopee on Tuesday with her son Logan, 4, is one of several entrepreneurs who got the courage to think of starting a business during the pandemic. For her, it brought flexibility to stay with her two young children.

Monica Birrenkott wasn't expecting to see interest rates as high as 11.5% when she sought funding for her new event-production business this summer.

It was a contrast from what she experienced during the pandemic, when the Shakopee resident took advantage of historically low interest rates to refinance her mortgage and buy a car.

Though the business landscape seemed favorable for her Full Swing Productions company - which specializes in LED video panel rental and installation - as in-person events returned, an unfavorable lending environment made Birrenkott question whether it was the right time to start a business. She did end up registering her startup in June, but knew it'd be tough to begin paying off the loans before the company generated significant revenue.



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