Don’t Wait to Grow: Using Cash and Credit Strategically in Uncertain Times
Uncertainty is everywhere right now. Interest rates, tariffs, labor shortages and supply chain slowdowns have business leaders feeling the pressure. And while many middle market and commercial companies have healthy balance sheets, they may be hesitant to make a move.
We understand that hesitation. But waiting too long can cost you opportunities. We have conversations every day with clients who want to grow but need a strategy to do it wisely. The good news is that with the right plan and right mix of cash and credit, you can move forward even when the future feels unclear.
Uncertainty is real, and so are the opportunities.
Our clients are dealing with a lot of variables, from rising construction costs and equipment delays to shifting tax incentives. Some clients are pausing construction while they sort out the cost impact of materials sourced from overseas. Others are watching consumer demand soften or navigating workforce concerns tied to immigration policy.
Yet even in this environment, we see signs of optimism. Some businesses are eyeing acquisitions, especially where competitors are struggling. Others are reshoring and diversifying parts of their supply chain, creating new partnerships and even launching joint ventures.
The companies that win in uncertain times are the ones planning ahead so that when the moment is right, they’re ready.
Find a smarter mix of cash and credit.
Many clients are asking: Should I use cash, borrow or both? There’s no one-size-fits-all answer, but there is a smart way to think about it.
Spending strategically—say, to buy a supplier or invest in a new facility—can help reduce long-term risk and build resilience. While it’s important to keep healthy cash reserves, you can't let it limit your growth options. In some cases, using credit to fund expansion lets you preserve liquidity while still moving forward.
Borrowing, when done thoughtfully, gives you flexibility. With credit, you don’t have to touch your cash reserves while maintaining room to react. That could come from a new credit facility or rethinking your current ones. Some clients are refinancing short-term credit into longer-term instruments, especially while swap rates are favorable.
Think of it this way: Your cash gives you strength, but your credit gives you reach.
Make a plan for the “what ifs.”
One of the smartest things you can do in uncertain times is re-assess your downside.
- What if revenue drops by 20 or 40 percent?
- What’s your bottom threshold for cash?
- How much concentration do you have in a few large customers?
By stress-testing your business now with help from a financial partner, you’ll gain clarity about what you can afford to do, and what you should prepare for. And given how quickly the world changes today, it pays to go big in projecting potential downsides. Do your forecasts reflect the “new normal”?
This also means looking at your fiscal policy: Do you know your “zero”? How much liquidity do you need to navigate the potential headwinds and mitigate your downside?
Start the conversation before you need to act.
At Pinnacle, we believe in being proactive, not reactive. Our best client relationships start before a decision is on the table. We work closely with our credit team, so when you’re ready to move, you’ve already laid the groundwork.
Now’s the time to ask:
- What does my borrowing capacity look like?
- How can I strengthen my financials for future opportunities?
- What would it take to put my growth plans into motion?
You don’t have to know all the answers, but you do need a partner who can help you find them.
Build your strategy with a partner.
A good financial advisor is there to help you think big, plan smart and move with confidence. Don’t let uncertainty keep you on the sidelines. Talk now about what’s next, because the best time to plan for growth is before everyone else does.
Chris Gruehn is a financial advisor based at Pinnacle's Atlanta Riverside office. He can be reached by email at Chris.Gruehn@pnfp.com or by phone at 470.990.8408.
