Law Firm Leasing Blog

3 Strategies for Your Firm’s Financial Stability

3 Strategies for Your Firm’s Financial Stability

4/22/2020


The COVID-19 pandemic has underscored the importance of being prepared to withstand an unpredictable business environment. Many firms continue to look to ways to stabalize cash flows and avoid putting critical projects on hold. Consider the strategies below to position your firm for financial stability and flexibility to navigate the uncertain times ahead.

 

1) Cash Reimbursement

Amidst economic volatility, having cash on hand may be more important than ever. Equipment and soft costs purchased within the last 6-12 months can be monetized to provide short-term budget relief through a cash reimbursement.

Benefits for Firms:

  • Improve short-term liquidity

  • Manage partner distributions

  • Preserve cash or other lines of credit

  • Take advantage of historically low rates

  • Spread cost of asset over its useful life

  • Diversify funding sources

Commonly Reimbursed:

  • Technology: Computers, servers, data centers

  • Office Buildouts: FF&E, construction & design fees

  • Soft Costs: Software implementations & licensing 

Considering your equipment as an additional source of liquidity is a quick and easy way for firms to increase cash on hand. A reimbursement will replenish your cash for 100% of a completed project’s costs, enabling you to reinvest in your operations as needed.

 

2) Rate Locks

Interest rates are at historical lows and financial market outlooks remain uncertain. Many firms are looking to lock in rates for current or future projects. Rate locks provide an invaluable level of security when borrowing funds and create cost savings for your firm. The rate secured on the day you sign the lease proposal will be the rate you receive when your project is ready to fund - whether that is now or within the next 12 months.
 
If you are planning any capital projects in the next year, taking advantage of fixed-rate financing with a rate lock allows your firm to secure today’s low rates and protect your firm from inevitable rate increases.
 
 

3) Flexible Payments

When you work with First American, we start by understanding your firm’s objectives and customizing a payment structure aligned to your needs. With our deferred payment option, you can implement new equipment or projects immediately, generate revenue from those investments, and pay later.
 
Amid periods of financial volatility, these financial tools can help your firm weather the storm. Whether you need short-term budget relief or want to position your firm for long-term stability, First American can help you implement the right financial solution.

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