Companies of all sizes, from local businesses to blue-chip giants, have taken a big hit from the coronavirus pandemic which will gut companies’ profits and affect not only their ability to keep operations afloat, but also their ability to borrow money, the New York Times reported. If companies are unable to tap credit to pay their rent, make payroll or finance other activities, it could force them to slash costs, lay off workers, pause investments and even declare bankruptcy. That, in turn, could worsen the recession that’s now widely expected and affect the financial markets — already stressed from stock-market plunges — where investors buy and sell the debt issued by companies, making it even harder for companies to borrow. “The economy is coming to a half of a dead stop,” said Michael Greenberger, a professor at the University of Maryland Francis King Carey School of Law. Businesses are having trouble opening or getting customers to engage normally, said Mr. Greenberger, whose research focuses on financial stability. “All of these businesses are going to at some time have to re-up their loans, renew their loans, roll them over. With the decline in revenues the ability to borrow money is going to be very problematic.” On Sunday, the Federal Reserve took the drastic step of slashing interest rates to nearly zero and enacted measures to keep credit pumping through the economy and prevent a wave of business defaults and closings. And in a letter to President Trump and congressional leaders yesterday, the U.S. Chamber of Commerce asked for sweeping changes to laws governing the Fed so that businesses with more than 500 employees could borrow directly from the Fed’s discount window, a lending facility that is open only to banks.
