Leave March Madness behind: Follow long-term game plan for winning capital decision

March Madness was not restricted to college basketball this year. When the Federal Open Market Committee last month raised its benchmark federal funds rate one quarter of a percentage point to 1.75 percent, it again stirred excitement among finance decision-makers and economic prognosticators. Some economists expect four or more increases in 2018.

Having watched the interest rate scoreboard as a commercial banker over the past decade, my advice from the sidelines is this: stick to your long-term game plan and put your company in a position to win when it comes to the cost of capital. Here are a few strategies to keep your head in the game:

1. Don't overreact to the "officials"

The Fed is like an economic referee, making calls to control the economy's pace. Don't lose your cool when the whistle blows. Compared with pre-financial crisis lending, today's rates remain relatively low and borrower friendly. Although more hikes are anticipated this year, they are expected to remain modest.

2. Maintain your game plan

As rates climb, don't throw out your playbook. Instead, call a time out and consult with your banker to ensure your borrowing decisions match your company's long-term plans and goals for continued growth and success. If you don't need the capital, don't borrow just to lock in the lowest rate. Interest rates should not be the driving factor when making borrowing decisions. Borrow if you must, but have a good reason for it.

3. Clock management

Think about timing when it comes to borrowing. While rates remain relatively low, you might consider making a few key borrowing moves now to fund some crucial projects and waiting to fund other projects later in the game. Consider the purpose of the debt on your balance sheet.

Would your company benefit from having a mix of floating and fixed rates? This allows you to hedge and still benefit from low floating rates, while also maintaining certainty for longer term, fixed rates.

4. See the court

Don't focus on interest rates alone for your capital strategy. You need to be aware of other negotiated factors when funding your company's financial future. Besides interest rates, other terms - loan maturity, advance rates, and guarantees - can offer great value. Many times, it makes good strategic sense to pivot from the interest rate toward other terms to advance your company's medium- and long-term game plan.

Now's the time to huddle with your banker or your interest rate risk adviser to learn more about your options. Work with your banker to find financial plays that match your company's risk appetite.

March will always produce madness. But the goal is to ensure that your financial future is deliberate - not purely defensive, based on interest rates' ebb and flow.

• Michael Bleecher is regional vice president for Wells Fargo Middle Market Banking in Chicago. Email him at Michael.bleecher@wellsfargo.com. The views expressed present the opinions of the author on prospective trends and related matters in middle market banking trends as of this date, and do not necessarily reflect the views of Wells Fargo & Co., its affiliates and subsidiaries.