The following article, written by Robert J. Hicks, Business & Finance Partner, Taft Stettinius & Hollister LLP, was published in the Indianapolis Star on October 28, 2008

Businesses Can Weather Economic Storm

As a result of a global economic downturn, frozen credit markets, devaluations of assets, and consumer fear, these are challenging times for businesses.  In an effort to restore credit markets, the US Government has undertaken a variety of activities including: (1) bailouts of Freddie Mac, Fannie Mae, and AIG, (2) passage of the Emergency Economic Stabilization Act (EESA) and the creation of the Troubled Asset Recovery Program (TARP), (3) creation of a commercial paper facility to purchase 3 month commercial paper, (4) investment of $125 Billion in nine large US banks (with $125 Billion of direct investment to follow for other banks), (5) increase from $100,000 to $250,000 in the insured deposit limit for FDIC and credit unions until December 31, 2009; (6) FDIC deposit guarantee for non-interest bearing accounts through December 31, 2009 and bank senior debt through June 30, 2009; and (7) this week's announced backstop for money market funds. 

Will this preliminary bailout plan work?  What should businesses do while waiting for this to work? 

Improving the financial health of banks, providing a fluid commercial paper market, and backstopping money market funds are intended to inject liquidity into the economy and fuel business and consumer spending.  While market reaction has been slow and erratic, the 3 month LIBOR has dropped about 100 basis points from its recent highs - providing some hope that the credit iceberg may start to melt. 
 
Practical Tips For Navigating These Difficult Times

While each business has its own unique challenges, here are some practical tips to consider during these difficult times. Read more.