Balancing Both Sides: Using Both Sides of your Balance Sheet

BALANCING BOTH SIDES: USING BOTH SIDES OF YOUR BALANCE SHEET

Download full commentary here: BALANCING BOTH SIDES: USING BOTH SIDES OF YOUR BALANCE SHEET

“Neither a borrower nor a lender be, for loan oft loses both itself and friend.” So said William Shakespeare
through his character Polonius in Act I Scene III of the play Hamlet. While Shakespeare clearly had a way with
words and insight into human psychology, he also was in need of sound financial advice. Owners of financial capital are tasked with its prudent deployment so as to earn appropriate return in support of a family’s or institution’s mission. As such, there is much time and devotion spent on the management of assets. But what
about the other side of the balance sheet? After all, many of our clients accumulated significant wealth through business building either as an entrepreneur or as an innovator within a larger organization. In doing so, these business leaders clearly understood the importance of capital structure – that is to say the mix of equity and borrowing that funded the assets needed to achieve their business mission. It is no different after the transition of managing an operating asset to managing financial assets. It is critical to have control over both sides of your balance sheet.