What the Fed did on September 16

The Federal Open Market Committee voted 12–0 to raise its target range for the federal funds rate by a quarter point, to 3.75%–4.00%. It was the first increase since 2023. The Fed’s reasoning was short: “Inflation remains elevated,” and it wants a faster return to its 2% goal.

The federal funds rate is what banks charge each other overnight, so you never pay it directly. But it sets the floor for almost everything else. The prime rate, which banks use to price many business lines of credit and SBA loans, normally moves in step with it. When the Fed goes up, prime-based borrowing goes up with it, usually within days.

For a business owner, the practical question is not “what did the Fed do?” but “which of my financing options just changed, and does it change my plan for the next 90 days?”

Which business financing feels it first

Not every product reacts the same way. Here is how the main options compare after the hike.

General ranges for established businesses. Every file is different, and speed depends on how complete your documents are.

The takeaway: if you already carry a variable-rate line or SBA loan, check your statement. If you need new money in the next few weeks, the hike matters less than how quickly you can get a decision.

Are banks tightening?

The data is mixed, which is itself useful to know.

• Large banks are holding steady. In the Fed’s July 2026 Senior Loan Officer Survey, banks said standards and demand for commercial loans to small firms were “basically unchanged” for the second quarter.
• Community banks are still cautious. The Kansas City Fed’s small business lending survey, released June 25, 2026, found about 10% of banks, on net, tightened standards again, extending a four-year trend. Loan demand rose across all bank sizes for the first time since early 2022.
• Many applicants still come up short. In the Fed’s latest Small Business Credit Survey, only 42% of applicants got the full amount they asked for, and 22% got nothing.

Put together: more owners are asking, banks are not opening the doors wider, and a rate hike will not make them more generous. That is why many established businesses keep a faster, non-bank route ready instead of waiting on a single bank decision.

Why speed matters more right now

Rates are only one cost. The bigger one is often the cost of waiting.

• Costs are already up. In Fora Financial’s 2026 business owner survey, 80% reported inflation-related cost increases and 73% said tariffs or trade policy affected their business.
• Cash flow is the top problem. 55% of owners in the same survey named cash flow as their biggest challenge, and 41% of those borrowing cited seasonal cash needs.
• Q4 is close. Holiday inventory, year-end payroll and new contracts all hit in the next 60–90 days. A bank decision that lands in December does not help an October purchase order.

When a supplier discount, a large order or a new contract has a deadline, the right question is total cost against what the money earns you, not just the rate. Our guide to factor rates vs APR shows how to compare offers on equal terms.

A five-step plan for this rate environment

• Size the gap first. Write down how much you need, what it pays for and when the money comes back. Borrowing the right amount matters more than chasing the lowest rate.
• Review the variable debt you already have. If a prime-based line or SBA loan is part of your plan, expect it to cost a bit more from here.
• Get your documents ready now. Your last 3 months of business bank statements (4 months in California, Florida and Virginia) and a short application. Ready documents are the single biggest factor in a fast decision.
• Compare offers by total cost. Look at the total amount repaid and the term, not only the speed. A fast offer is only a good one if the use of funds pays for it.
• Avoid stacking. Taking several advances at once to cover one gap is the fastest way to turn a timing problem into a cash flow problem.

Where RAN Funding fits

RAN Funding is a business financing company, not a bank. You fill out one application for our lender network and work with one dedicated specialist, who matches your file to the options that fit, from working capital to lines of credit and Business Term Loans.

We place $20,000–$500,000+ in fast business loans, and approved files can be funded in as little as 24–48 hours. Our programs are built for established businesses: most clients have 1+ year in business and $20,000+ in monthly revenue deposited in a business bank account. For a realistic look at timing, see same-day business funding and how fast you can get a business loan.

Common questions