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Don't expect Main Street to accelerate borrowing overnight

What's more relevant to small business lending appetite is optimism

Small business owner
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As years of low interest rates start to wind down, don't expect Main Street to accelerate borrowing overnight.

There can often be a disconnect between the Fed and smaller businesses, which are driven by other variables including cash flow, business opportunities and loan availability and terms. If you're a growing business, you've likely already signed onto loans. For the rest of the smaller guys, however, it's likely borrowing will ramp up gradually to stay ahead of higher lending rates. And if anything can trigger more borrowing for small companies, it's a more upbeat mood about business prospects.

"Business credit is so different than consumer credit. It's driven far less by rates and far more by availability in terms of both loans and market opportunities," said Jeff Stibel, vice chairman of business researcher Dun & Bradstreet. "Rates are almost irrelevant."

The Federal Reserve, as widely expected, approved a quarter-point increase in its target funds rate on Wednesday. It was the first rate increase in nearly a decade.

Read MoreFed raises rates for first time since 2006

Looking for higher Main Street sentiment

What's more relevant to Main Street's lending appetite is optimism among small business owners — the perception of future opportunities and conditions — which has remained mixed. The National Federation of Independent Business' optimism index for November fell slightly to 94.8 from 96.1 in October. Reasons cited for the dip included slower sales projections and growing inventory. This index reading was also below the long-term average of 98.

Other data suggest pockets of Main Street are in a holding pattern. More than half of small businesses surveyed said they believe the current economic environment is restricting business growth opportunities, according to the Dun & Bradstreet and Pepperdine University's Private Capital Access index for the fourth quarter.

And perhaps more to the point, 58 percent of small businesses said a rate hike would have "no effect" on their business, according to the Dun & Bradstreet's survey released Thursday.

Read MoreWhy small businesses don't want a loan

For now, demand for credit and access to capital remain slightly lower than year-ago levels. Dun & Bradstreet's index for companies with less than $5 million in revenues shows demand for capital at a score of 36.8 for the quarter, compared with 38 in the same quarter in 2012.

"Demand overall is lower — but not as low as you might think," said Stibel. He added that more small businesses have been turning to alternate lenders including OnDeck Capital and Lending Club, which can have looser lending standards and distribute cash more quickly. "Money is flowing into small businesses, which is exciting because it means the market is robust for businesses to get loans."

Looking ahead, Main Street needs to feel more confident to borrow.

"Rates aren't a big deal for small business owners," said Bill Dunkelberg, chief economist for the National Federation of Independent Business. "It's not the cost of borrowing. It's the potential return on what you borrow. You can still borrow cheap money, but can you put it to work?"

Read MoreHow will Main Street react to higher interest rates?