The Price of Patience: Fed's Hike Lands as Business Formation Cools

Key Trends

• The NFIB’s August Small Business Optimism Index slipped 1.1 points to 98.7 — still above the 52-year average of 98.0, but a second straight monthly decline. The Uncertainty Index eased 2 points to 89, yet remains far above its long-run mark of 68: owners are calmer about what’s coming but still bracing for it.

  Review

  Linked URL slug reads “…optimism-declines-in-september,” but the figures cited (98.7, -1.1 pts, Uncertainty Index 89) match NFIB’s August release (“Main Street optimism cools in August but holds above long-term average”), not a September one — the link appears to point to the wrong press release — suggested action: fix the link.

• The Census Bureau’s August Business Formation Statistics, released September 11, showed total applications falling 7.8% month-over-month to 531,728, while high-propensity applications — those most likely to become employers — point to just 28,501 new employer businesses within four quarters, a 4.6% drop. One down month doesn’t make a trend, but it’s the softest reading since spring, and it lands the same week owners are absorbing news of higher borrowing costs ahead.

Notable Businesses & Launches

No significant developments today.

Funding & Investment

• Owner.com raised $240 million in a Series D led by Goldman Sachs Alternatives at a $2.3 billion valuation, joined by Meritech, Redpoint, Headline, and Benchmark’s Jack Altman. The company built its business on a flat monthly subscription as an alternative to the commission-based delivery apps that squeeze independent restaurants’ margins, and says it will push its “AI-native” agents — which already manage restaurant websites, marketing, and online ordering — into salons, spas, and grocery stores. It’s a bet that the same operators tightening their belts against higher borrowing costs will still pay for software that claws back revenue from third-party platforms.

Regulatory & Economic Context

• Update: Monday’s brief flagged ~93% odds of a hike; the FOMC delivered, voting 12-0 to raise rates a quarter point to 3.75%–4.00%, the first increase since 2023. Sixteen of 18 officials now project at least one more hike this year, and variable-rate borrowers — SBA 7(a) loans among them, currently running 9.75%–13.25% APR — should expect the increase to hit within one to two billing cycles.

• The SBA’s proposed overhaul of small-business size standards, published August 20, would collapse the roughly 1,000 industry-specific standards it now uses into 338 broad NAICS groupings and cut the factors behind each threshold from seven down to three: national industry size, number of geographic markets, and a net-imports adjustment. The result would newly qualify roughly 114,000 companies as “small,” widening access to federal set-asides and SBA loan programs but pulling today’s small businesses into competition with firms up to ten times their size in some industries. The agency has logged more than 65,000 comments on the proposed rule, with the window closing September 21.

  Review

  “newly qualify roughly 114,000 companies” — this is SBA’s own impact estimate for its own proposed rule, presented as settled fact — suggested action: add > [!unverified].

Takeaway