The Federal Reserve raised interest rates by a quarter-point Wednesday in a widely-expected move, amid rising confidence that the economy is poised for more robust growth.
CNBC then reported that M&T Bank announced on Wednesday that it would increase its prime lending rate to 4 percent from 3.75 percent.
It’s the first major bank to announce a change to the base rate for consumer loans, which has been at 3.75 percent during most recent weekly surveys.
BB&T and Citibank have also increased their prime rates to 4 percent from 3.75 percent.
The prime rate is the rate at which banks lend to their most creditworthy customers, and can be used as a benchmark for other loans such as those for small businesses or credit cards.
Though the Fed doesn’t set the prime rate, changes in the rates set by the central bank tend to be closely correlated to the prime rate set by individual banks.
When rates climb, borrowing gets more expensive for businesses and consumers.
That’s why at BBA Factoring, even though the Prime Rate has been at historic lows we’ve been planning ahead and putting our clients with factors who don’t have clauses in their contracts to pass the rate increase along. Timing is everything when you’re hauling a load and we do the ground work so you don’t have to.
Talk to us about what we can do for you to get you the best factoring deal on the market. (Contact us for a free quote now.)