Plan Now for Economic Weakness as a Result of COVID-19 Disruptions
By Jeff Bardos, CEO, Speritas Capital Partners (Jeff’s Bio)
Preparing for Short-Term & Long-Term Economic Weakness as a Result of COVID-19 Disruptions
These are difficult times for all of us, personally and professionally.
On the professional front, businesses are facing uncertain customer demand, difficult supply relationships, and tight cash flow issues. Business owners need to consider the cash flow implications if this economic weakness lasts longer than currently anticipated.
Lenders may show some flexibility in enforcing loan agreements.
The federal bank regulators have urged supervised banks to “work constructively with borrowers.”
The Coronavirus Preparedness and Response Supplemental Appropriations Act (H.R. 6074) signed into law last week provided the SBA with a small amount of support, likely funneled through their disaster loan program.
Hopefully, this flexibility and support will provide meaningful relief to businesses managing very tight working capital situations.
The good news is the cost of borrowing has gone down.
The Fed cut short-term interest rates by one-half of a percent and as a result LIBOR-based and Prime-based lending rates have fallen. These rate cuts affect not only asset-based lending, but term real estate and SBA loan rates too.
Asset-based lending, including accounts receivable, purchase order, and inventory financing are effective ways to leverage business assets during tight cash times. M&E and real estate collateral can be used to generate term loans as additional sources of cash infusions.
As a trusted advisor to businesses and commercial real estate investors, Speritas Capital offers advice based on our experience and relationships with our broad lender network. We can help clients think through their financing options and identify options which address the current weak environment and allow for growth and success when demand strengthens.
About the Author
Jeff Bardos, CEO, Speritas Capital Partners
Jeff has over 25 years of experience in the financial services industry. After graduating from the Columbia Business School, he joined the New York Federal Reserve Bank as a senior staff member in Bank Supervision, leading the Bank Analysis department. From the nation’s central bank, Jeff moved into the private sector, working at senior levels in commercial banking, retail banking and risk management. He has also played senior founding roles in several start-ups. Learn more about Jeff.
About Speritas Capital Partners
Greenwich, CT based Speritas Capital works with small to lower middle market businesses and commercial real estate investors to provide financing solutions for difficult credit, collateral and cash flow situations. We have relationships with over 90 national lenders and private investors that give us the product breadth to assist clients in identifying funding options that go beyond what a traditional lender can typically provide.
We can arrange financing for a wide range of products: asset-based lines of credit, accounts receivable finance, purchase order finance, equipment finance, SBA and USDA guaranteed loans, Fannie Mae/Freddie Mac loans, FHA/CMBS loans, and bridge/construction and permanent commercial real estate loans.
Speritas Capital Partners specializes in difficult credit, collateral and cash flow situations and we never take upfront fees.