By Lisa Anderson

Interest rates have increased by a historic amount within the last year. Increases of almost five points on such an aggressive timeline are already having a significant impact on the ability of manufacturers and distributors to fund and support their business growth. With typical business loans renewing every five to seven years, the impacts will continue to pile up.

In addition to high-interest rates for loans and lines of credit, costs have been increasing at a rapid pace during the last two years. The producer price index (PPI) rose by over 15 percent in the last two years. Typically, clients have been able to pass on part of these increases to customers, but most, if not all, have absorbed part as well, driving margins down. On top of that, wage rates have been increasing in alignment with these factors as well. Thus, manufacturers and distributors are experiencing higher input costs and higher costs to secure capital. This situation will not change anytime soon, so smart manufacturers must take control of their destiny.