With the holiday season officially underway, economists are gazing into their crystal balls to see what the future holds. What can you expect to see in 2024? Answers vary, but you’ll be hearing the phrase “soft landing” a lot over the next few weeks regarding America’s economy. Globally, much of what caused distress this year will continue to worry investors. China’s economy is struggling with debt and property troubles, and a rapidly aging workforce. The Israel-Hamas conflict is expected to stifle growth in European markets and some worry it could spill over into the Middle East, threatening the energy sector.
The United States, typically more resilient than foreign markets, may see some relief in the latter half of 2024, with economists predicting potential federal rate cuts in Q3 and a boost from the manufacturing and tech sectors. That doesn’t mean it won’t be a rocky and uneven recovery, but there’s hope for the big picture. Investors remain jittery and stocks are expected to be volatile as they overreact to minor fluctuations in various market sectors. The key will be to take a step back for a more comprehensive view rather than to become caught up in knee-jerk reactions.
So, what do these predictions mean for your business? We’ve identified four major target areas to boost your outlook for 2024. With the right combination of asset management strategies, you’ll be prepared to thrive next year.
Industrial Revolution 4.0
If this is your first time reading about Industrial Revolution 4.0, or 4IR as many are calling it, then it’s time to catch up to the trend. The driving force behind this newest revolution is intelligent manufacturing and machinery. Forward-thinking companies started piloting related tech around 2018. 4IR goes beyond just computer/machinery integration and into next-level implementations like cloud computing, blockchain utilization, autonomous vehicles, additive manufacturing, and more. Of course, everyone’s favorite hot topic, Artificial Intelligence, factors heavily into 4IR as well.
Businesses that embrace 4IR tech will have a decided competitive edge over those that lag behind. But you don’t have to be running a manufacturing plant bristling with robotics to take advantage of this revolution. Improvements in efficiency, advanced analytics, and renewable energy are hallmarks of this new tech. To finance software and machines that can help your company not only stay current but outpace competitors, look for exceptional financing to expand in 2024. Due to increasing demand for tech assets, lenders are dropping rates for equipment loans that seek to upgrade a business’s efficiency capabilities and sustainability features. Government incentives are making “green” tech investments especially affordable and available right now.
Upskilling and Reskilling
There’s no sense in upgrading your business with the hottest new 4IR tech if nobody in your company knows how to use it. So, your choices are to rehire or retrain. Upskilling takes the staff you have on hand and expands their capabilities to understand and work with new tech. Reskilling is a way to give your staff the ability to shift into another position within the company. Both involve various degrees of retraining, which can mean continuing education courses, software company symposiums, or one-on-one expert training sessions depending on how your company is structured.
More and more companies prefer to upskill or reskill rather than let their current talent go in favor of new talent with new skills already in place. However, when you opt for any of those three options, there’s a lag time when your staff won’t be as productive while they’re learning. This can cause some crunch when it comes to working capital now, but will pay dividends as your team increases their knowledge and competitive edge.
Thankfully, there are many easy avenues to short-term working capital financing. Our team puts financing plans in place to assist your business in financing the capital expense as well as accessing the funds necessary to grow. When you talk with our team, ask about factoring, lines of credit, and SBA loans that can help your company easily address these necessary upgrades to physical plant and talent along with improvements in technology.
Income Investing
For 2024, the nation’s top economic advisors are saying cash is out and income investing is in. Cash is expected to underperform other asset classes next year, which means if you have been holding onto your cash, now is the time to invest it. Target your investments with an eye toward income-generating commercial real estate. Look for long-term assets in healthcare and industrial sectors as well as energy conversion and infrastructure opportunities.
CRE loans from high-quality lenders such as SBA-backed loans and USDA partners will likely be your best options for next year. They can provide low-cost financing to either upgrade your own business’s assets to take advantage of sustainability incentives or acquire property in upturning industrial markets. Talk to your broker about long-term financing for commercial mortgages or a short-term business acquisition loan to bring in income generators like hotels and multifamily housing.
Debt Management
2023’s Federal rate hikes have changed the lending atmosphere, but the economy is still experiencing a lag in realizing the effects. This past month has seen a surge in debt consolidation and refinancing demand in the face of uncertainty. That’s despite potential rate cuts in Q3 of 2024 as the economy levels out. While the Fed might be done raising rates, the full impacts of the 2023 hikes are yet to be felt. This means potential spikes in corporate lending and refinancing. If your company is currently dealing with high-interest rate loans or expects maturing debt in 2024, it’s a good idea to tackle those with a refinance or consolidation sooner rather than later. Corporate refinancing rates could increase before the end of next year, making it harder to manage debt the longer you wait. Ask your broker to help you pinpoint the best targets for consolidation if you’ve been juggling multiple debts this past year. Refinancing now can free up working capital to give you increased flexibility going forward.
We’re heading for some interesting ups and downs next year and it will take maneuverability, adaptability, and a broad view to stay competitive in 2024. Don’t undervalue input from our financing team. We can customize your refinancing, consolidation, and asset acquisition options to fit your business growth goals. We offer loan-to-loan comparisons that save you from wasting the remaining holiday shopping hours searching the far corners of the internet for the right financing. Consult with our team now to get a jump on 2024.
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