She's owned the business at 111 S. Fifth St. for the past five years. I just had to make a business decision. Her variable-rate loan, backed by the U.S. Small Business Administration, looked pretty good when she took it out five years ago. The majority of U.S. Small Business Administration-guaranteed loans outstanding in North Dakota are variable rate loans, said Marlene Koenig, an SBA spokeswoman in Fargo. SBA guarantees qualified loans made by private lenders.
Banks decide whether they want to go variable or fixed rate.
If it's a new business, they usually go variable rate. Of course, if interest rates are lower then it's good for them, but if it goes up it's not. Last week the prime rate was at 9.5 percent. The bank actually sets that interest rate. Doug Volk, vice president of commercial lending with First Southwest Bank in Bismarck, said higher rates can pinch the bottom line.