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Liquidity Equals Flexibility

At a recent seminar, the topic of liquidity, or cash on hand, came up as an important tool that a business should have at their disposal. It may be true in other regions, but specifically in Lancaster County, there is a culture of paying debt off quickly, at the expense of having liquidity available. The debate goes, “Why pay interest expense on debt while earning a lower rate than that on our deposits.” This argument doesn’t take into the account the importance of the flexibility that having cash on hand provides. It is easy to lose sight of that…

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