Interest rates have been front and center in financial discussions lately. As a commercial banker, I’m often asked about them – and the most common question I receive is about just how low rates might get.
We all might remember those drastically low rates during the pandemic. Back in April 2020, the Fed dropped rates to just 0.05% to help keep the economy afloat. This was the result of a once-in-a-lifetime event that paved the way for the 3% fixed-rate loans that many borrowers received. And while lockdowns are now behind us, the unfortunate reality is that the era of ultra-low interest rates is likely behind us too.
As I write this in October of 2025, the Fed Funds rate sits around 4.00%. And while this may feel slightly steep, today’s interest rates are still historically low. It was only back in 1984 that we saw rates over 11%!
Shifting to the present, there are talks of several more rate cuts in the coming months. So, what does this mean for your business?
Rate cuts like these will primarily benefit those looking for short-term loans – like those for working capital – because the short-term rates tend to move with the Fed Funds Rate. Meanwhile, long-term, fixed-rate loans – commonly used for purchasing commercial property or fixed assets – have an interest rate that is based on where the market expects the economy to be headed over the next few years. So, when you see a fixed rate today, it already reflects a lender’s expectations for future rate movements, like those mentioned.
And while long-term rates are forward-looking – no one, even the pros – can time the market with 100% accuracy. This is why the best time to borrow is when your business has a real opportunity to grow. Waiting for rates to (potentially) drop by a quarter point could mean missing out on a bigger opportunity.
Like death and taxes, we know that future market uncertainty is inevitable. When these challenges happen (as they always do), having a relationship with a banking partner who understands your business will make all the difference. One of my colleagues likes to tell our customers, “You don’t have issues; the market has issues.” And he is right. When times get tough, customers of Rockland Trust know that we will have their back.
Ultimately, I believe the best way for a business to navigate today’s interest rate environment (or any rate environment) isn’t to wait for the perfect moment – but to find the right banking partner who will help you capitalize on an opportunity. Someone who understands your business and who you know will answer your call. At Rockland Trust, we’re here to help you navigate whatever comes next, with real conversations and real support.
By Peter Staiti, SVP, Regional Commercial Banking Center Manager at Rockland Trust Bank
