The Interest Rate Conundrum: Borrowing Costs for Small Businesses Interest rates are a critical aspect of small business finance, yet many entrepreneurs struggle to understand their impact on borrowing costs and overall financial health.
They are a fundamental concept in finance that can be complex. An interest rate is the cost of borrowing money from a lender, expressed as a percentage of the principal amount borrowed.
When you borrow $100 at an interest rate of 10%, you'll owe back the original $100 plus $10 in interest.