You Could Be Next if You Don’t Watch Out

June 10, 2024

May’s jobs report just added more evidence that rate cuts anytime soon are unlikely to happen.  Higher interest rates, like inflation, appears to be sticking around.  A recent report by the AP also shows that the list of publicly traded companies with serious debt issues (aka Zombie Companies) continues to grow. 

If you believe this elevated rate environment will persist and have floating rate debt, you should probably look to refinance or lock in the best interest rate possible.  Over the next few weeks, we will review the key documents that a company or organization will encounter as it borrows money or refinances/issues debt. 

Below is a rundown of the topics:

  • Commitment Letter / Term Sheet – this is the letter from the lender to the borrower outlining the key terms and conditions of the loan (sometimes its also called a term sheet)
  • Loan Agreement – this is the main lending document that sets out the terms of the loan, the borrowing and repayment process, obligations of the lender and borrower and events of default
  • Promissory Note – this item documents the borrower’s obligations under the loan agreement
  • Guaranty & Collateral Documents – these are the additional promises made by the borrower and/or related parties to repay the loan or debt; there are also security agreements which outline the lenders position on the borrower’s assets (e.g., UCC, DACA, Perfection Certificates, etc.)
  • Other Documents – these documents can include a resolution approving the loan package, opinion of counsel, flow of funds, solvency certificates and so on. 

Navigating the rising interest rate environment with an experienced commercial lender, investment banker, business attorney and/or a business financial advisor will pay dividends in the long run.  
Other Items of Interest

As always, please don’t hesitate to email myself (, Andy Miller (, Christian Miller (, Erik Spurlin (, Brad Leber ( or anyone in our office with questions or comments.  

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