| Interest rate cuts increase borrowing options for CFOs |
The Federal Reserve's recent interest rate cuts are presenting chief financial officers with the opportunity to borrow money on more favorable terms for priorities like expansion or acquisitions. Last week's 0.25% interest rate cut came after a larger 0.5% cut in September. "The market definitely feels like there are more rate cuts to come," said UHY audit partner Ro Sokhi. "The last few years we saw the use of private capital, used to finance different transactions, but that's expensive. There's a lot of excitement these days that the Fed is lowering the borrowing rate, and CFOs can reenter the traditional funding market," particularly in the life science, retail, and technology sectors. "It's never certain as to what direction the interest rates will definitely go and whether companies can absolutely take advantage of the capital once the money comes in," he added. "But in the near term we're continuing to see companies finding alternative ways to free up capital, either through cost reductions or working capital programs, and then divesting of non core assets, brands and things like that. What we're seeing is a combination of using capital that's available, as well as using the newfound lower interest rates."
