Nobody can say with certainty how the next quarter or two will play out relative to inflation, recession, or the price of eggs. U.S. banks have been gradually reducing credit supply for the last 18 months, reflecting a weaker and more uncertain macro outlook and reduced tolerance for risk.
Usually with credit tightening the impact is manifested by reduced capital expenditures and slower payroll growth in the future. Whether or not this triggers a further decline in business economic activity, we shall see.
When the credit gets tighter...that is when relationships matter most with lenders. CFOs have been amping up the transparency and discussions with their lenders to make sure the strategy, performance, and general direction of the company are well understood. Liquidity is king. Always keep the information spigot open and the lines of communication strong. Of course, a little belt-tightening and some wins in the marketplace are always welcomed!
© Copyright 2023. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
