Meghan Liddy – SVP Capital Markets
March 2020

With one eye on the news and the other on the Dow Jones sliding 10,000 points, control just might feel like the furthest thing from reach. But you really do have some options.

The best thing a business or property owner can do in uncertain times is to control whatever risk they manage. Businesses are adjusting their models to maintain operations in a new environment. Many are setting up remote workers, restaurants are switching over to takeout and delivery options, and retail grocers are balancing operating hours and safety measures while maintaining inventory. Ultimately, it is a period of adjustment for all businesses.

Interest rates continue to drop and even with interest rate floors, the cost of capital remains at historic lows. If you have a long-term investment horizon, locking in a fixed-rate financing now is the smartest move you can make with your real estate or other fixed assets. You should also have low cost operating capital available to help with interruptions in your liquidity.

That said, Kelleher & Sadowsky can help you in two important ways. One, you might need to help the bank understand your business challenges in the coming months. We can put models together to present to your bank, and negotiate new terms for you to support your business through this challenging time. And two, if you have a loan maturity coming up, an interest rate of 3.5 percent or more, or if you are looking at acquisition opportunities, call us. There is no team that knows the local commercial lending environment like we do, and we can secure low cost capital with a bank that will be there for the long haul.

Given that banks –– just like businesses across the state –– are juggling worker safety and simultaneously maintaining operations, things will not move as quickly as before. But ultimately the banks are going to continue to lend. Many of them will implement interest rate floors, which is the only way they can maintain profit margins and to continue to lend.

The need for adjustments also applies to the economy. The fed is stepping up with easing measures including the announcement that they will purchase up to $1 trillion in commercial paper over the next year. Massachusetts has announced emergency business loan funds for small businesses. This, combined with interest rate cuts and further relief measures to come, will support liquidity available to businesses and keep the economy going. Heading into this period of transition, the knowledge that the government interventions are coming provides some comfort. These moves at both the state and federal levels will backstop some of the near-term pain and help us to move forward.

In the short term, take care of your family and your neighbors. And if you need help with your business or real estate financing, call us! We can help!

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Meg Liddy is Senior Vice President of Capital markets at Kelleher & Sadowsky. She specializes in Debt Placement. She can be reached at [email protected], or 508-635-6797.