Back-to-school season is a major revenue driver for many small businesses – especially those in retail, services, and education. But with rising inflation, higher interest rates, and increasing supplier costs, turning a seasonal boost into sustainable success is getting tougher.
From school supplies and after-school programs to clothing shops and tutoring services, small businesses are feeling the squeeze. If your business supports students or families, here’s what you need to know to stay competitive and financially strong this fall.
Inflation is driving up operating costs
Nearly 58% of small businesses now cite inflation as a top concern, especially for supplies and payroll. As manufacturers and distributors pass costs to merchants, the result is squeezed margins and tighter budgets.
Tip:
Routinely review and renegotiate vendor contracts and adjust pricing thoughtfully – don’t skip explaining why your prices changed.
Higher interest rates are making loans pricier
Interest rates – used to tame inflation – are keeping small-business loan costs elevated, often 3.5 – 4.5 percentage points above prime. Financing growth is becoming more expensive, especially for startups and small operations.
Tip:
Lock in fixed-rate financing where possible to avoid future hikes and consider alternative funding like revenue-based financing or merchant advances.
Tightening credit access
Lenders are becoming more selective. Loan approval rates have declined 15%, driven by stricter underwriting and regulatory demands. Many small businesses face hurdles accessing short-term funding for growth or inventory.
Tip:
Strengthen your business credit profile (pay on time, lower debt ratios) and build a relationship with your banker – credit unions and community banks may be more flexible.
Beware tariff-driven cost jumps
New tariffs (on Chinese imports, auto parts, and steel) are already impacting 36% of U.S. small businesses. Expect upward price shifts in supply chains – so what you pay today may not be what you pay tomorrow.
Tip:
Diversify suppliers where possible and build a small buffer into pricing to absorb minor cost adjustments.
We’re here to help you navigate what’s next
Back-to-school season may bring new challenges, but you don’t have to face them alone. At Rize, we’re proud to support the local businesses that keep our communities going – especially during busy seasons like this one.
Whether you’re restocking inventory, adjusting to rising costs, or planning your next phase of growth, our team is here. Let’s build something stronger – together. Contact our business banking team today.