The 1st prediction is that 2016 will be affected by politics.
Congressional elections will be as important as the presidential election in terms of determining the direction of the country. A sharing of power generally means a more stable economy. On the other hand, when a single party dominates, greater pressure for social legislation and economic policies seem to be prevalent. Bottom line; we can expect economic volatility and uncertainty until the elections are over.
Prediction number 2; it will be a challenging growth year for medium sized companies.
New sales and revenue are going to be harder to come by as the U.S. economy begins to experience the same slowdown felt by the global economy. Larger companies, a demand source for middle-market suppliers, will begin to cut purchases and work off of inventory.
The third prediction is that 2016 will be the year of the mega-merger.
Mega-mergers are expected to continue through 2016, and smaller companies will be attractive add-on acquisitions to larger companies. Smaller companies that demonstrated a track record of profitable innovation and have a compelling brand are particularly in demand. You might consider preparing your company for acquisition.
The fourth prediction is that lower oil prices can be expected through mid-year, followed by gradual increases in the cost of oil.
Expect massive consolidation of smaller U.S.-based oil exploration and production companies, and a decrease in worldwide production to match demand, thereby stabilizing oil prices about mid-year. Consider purchasing futures on raw materials and energy early in 2016.
The fifth and final prediction is to expect an increase in interest rates and tougher credit for business.
According to a report published by the Small Business Administration, nearly a third of small businesses are without the capital that they need. Many businesses don’t even apply for financing because they believe they will be turned down. Expect tighter capital markets for small business in 2016 and higher borrowing costs for those companies that are able to even get credit.
To prepare your company for the challenges and opportunities that will arise in 2016, contact Universal Funding to discuss invoice factoring as a viable and inexpensive alternative to borrowing money. Call 1-800-405-6035 or visit us at UniversalFunding.com.
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