High gas prices could slow consumer spending

Even though gas prices have edged lower since the beginning of the year, the current average per gallon is near the "breaking point" for many consumers, which could hold back spending in other areas, such as retail. 

If Americans don't get a break at the pump in the coming months, retail sales could continue to fall, which might lead many small- to medium-sized retailers to enter a period where cash flow is stagnant. Should this occur, these businesses could struggle to operate at normal levels, but inventory financing could provide them with the funds needed to get through such a time. 

According to a survey from AAA, 50 percent of U.S. adults said gas prices are "too high" when they reach $3.44 per gallon. Currently, the national average is $3.52, so prices are beyond the point where many consumers believe they are too expensive. 

President and CEO of AAA Robert Darbelnet said that many consumers have changed their driving habits as a result of high gas prices, and others have altered their attitudes toward spending. 

"It is possible there is a new normal in terms of consumer attitudes now that gas prices have remained above $3 per gallon for more than two years," Darbelnet said. "Most people have resigned themselves to paying higher gas prices and are cutting back on driving, shopping and dining out to save money."

Small- to medium-sized retailers could begin to feel the affects of high gas prices if they don't fall in the coming months, as consumers could shy away from retail spending. If this occurs, these businesses could turn to inventory financing, which allows them to obtain a revolving line of credit using current inventory as collateral.