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High-interest rates hurt Utah local businesses' growth

Posted at 6:17 AM, Nov 08, 2023

WOODS CROSS, Utah — High interest rates are an increasing burden on consumers and business owners; at 5.25—5.5 percent, they are the highest they've been in over twenty years.

As money becomes more expensive to borrow, businesses are having a difficult time acquiring the resources they need to expand.

“I have been actually told, ‘Instead of working capital, we are just going to send you a credit card,’” said Keni Aikau, owner of The Hungry Hawaiian.

“What’s a $50,000 credit card at 27 percent interest going to do for me?”

Aikau serves traditional Hawaiian dishes at his two food trucks and two restaurant locations in Provo and Woods Cross.

He points to the quality of the food and a personal connection he makes with customers as reasons why they come back.

Another reason is the teriyaki sauce, which he says is the best in the state.

His low sodium and gluten free Hungry Hawaiian teriyaki sauce is sold in several grocery stores in Utah.

But Aikau would like to offer it to the masses.

“We have a difficult time meeting bigger demands,” he said.

Currently, Aikau is trying to secure a loan that would allow him to build his own bottling facility, but getting that capital is proving to be a challenge.

So far, the only responses he has received have been rejections.

“We are profitable,” Aikau said. “The cash flow charts, everything shows it. We are profitable. So what am I missing?”

He says banks aren’t approving him for a large loan because he lacks collateral such as land or a home, and without that collateral, they won’t take the risk.

“I understand a bank is a business and they are trying to make money, and the interest rates, that's where they make their money,” he said. “But are they really helping their community?

Aikau’s challenges aren’t isolated.

A survey conducted by Goldman Sachs found that 79 percent of small business owners are concerned about their ability to access capital and 21 percent fear they will be forced to close if they can’t expand.

“Most small businesses haven’t seen these types of interest rates before,” said Joe Wall, the National Director of the 10,000 Small Businesses Voices program.

“About a third of businesses say this year is the most difficult they have faced over the last four.”

And there is no telling when rates may start falling to ease access to capital.

“For a lot of businesses, it's making the best of a tough situation,” Wall said. “A lot of this is out of their control.”

But these challenges won’t stop Aikau from working to achieve his goal of mass producing his teriyaki sauce.

“This is where the dreams start,” he said. “In a small businesses, the mom and pop are just getting by.”

Despite the difficult economic climate, he is confident in his product.

It is confidence that is backed up by the words and comments from his customers that is giving him the strength to weather the storm.

“We had people come back and say, ‘we were at a luau and realized it was catered by you guys because we tasted the chicken.’” Aikau said.

“Nothing tastes like your teriyaki chicken. That’s pretty awesome, pretty amazing.”