How Will Main Street React to Higher Interest Rates?

While small-business optimism is holding steady by a variety of indicators, that increased outlook hasn't translated to more borrowing on Main Street. And if small businesses aren't interested in loans when rates are low, will they change their tune with a rate hike on the horizon?

The answer is mixed. Historically low interest rates haven't pushed small businesses to borrow from banks, as noted by Fed Chair Janet Yellen during her congressional testimony in February. Experts cite a disconnect between the Fed and Main Street, as borrowing is often driven by cash flow and opportunities to derive returns rather than interest rates alone.