Industry: Nonprofit

Now is the Time to Consider Rate Locks

Gain Predictability in Today's Unstable Rate Environment

Federal interest rates are on the rise and are expected to continue to rise. In this unstable rate environment, forecasting budgets and managing financial risk is challenging. Rate fluctuations can increase financing costs and drastically affect your organization’s bottom line. Amid financial uncertainty like we are experiencing today, rate locks can provide a level of security that's invaluable when borrowing funds. These enhancements can be applied to leasing and financing products through First American.

	Future Outlook is Uncertain The plan for 2018 is for four interest rate hikes according to the Federal Reserve Chairmain, Jerome H. Powell. As of June 2018, we have experienced two of those hikes, with the SWAP rate up to 3%. The U.S. hasn't seen a rate at 2% since 2008, following the Great Recession. Looking ahead, the Fed has hinted at an even more aggressive pace in the coming years to keep the economy from overheating. In fact, according to Economist Ernie Goss, the economy will be tested in times ahead as potential trade wars contribute to slow growth and higher prices for inputs, thereby pushing the Federal Reserve to be more aggressive in raising interest rates.
	Mitigate Risk with Rate Locks Gain predictability in this unstable environment by securing a rate lock for projects funding as far as 12 months from now. With a rate lock from First American, the rate secured on the day you sign the Lease Proposal will be the rate you receive when your project is ready to fund (up to 12 months), allowing you to avoid the impact of the ever-increasing rates on long-term projects.
	Take Advantage of Fixed Rate Financing In addition to rate locks, First American can help stabilize your monthly cash flow with fixed monthly payments. All of First American's products are available with fixed-rate financing—from tax leases and capital leases, to build-outs and beyond. Our tailored financing structures remove uncertainty from your most complex projects by providing a known, fixed rate and giving you peace of mind that comes from minimizing interest rate risk.

The Bottom Line

In today’s rapidly evolving business environment, the only way to stay competitive is by acquiring new equipment, technologies and facilities. With impending Fed rate increases, your cost of funds for these acquisitions will not be lower than they are today. Now is the time to plan for both the short- and long-term to secure the lowest cost of funds. Contact us today to learn more.

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First American Commercial Bancorp, Inc. is a wholly-owned subsidiary of City National Bank. Deposit products and services are offered by City National Bank Member FDIC. City National Bank is a subsidiary of Royal Bank of Canada. For California clients: Loans made or arranged pursuant to a California Finance Lenders Law license. All trademarks are the property of their respective owners. Additional terms apply and can be found by visiting faef.com/terms.

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Now is the Time to Consider Rate Locks

Gain Predictability in Today's Unstable Rate Environment

Future Outlook is Uncertain

Mitigate Risk with Rate Locks

Take Advantage of Fixed Rate Financing

The Bottom Line