Cost Of Money May Become Barrier For Fast-Growers

Two years of interest rate increases from the Federal Reserve apparently have had little impact on fast-growing U.S. privately held manufacturers and service providers. "These companies-and others-have used the recent period of business expansion to strengthen their gross margins, increasing their ability to self-finance," observes Tracy Lefteroff, global managing partner of private equity and venture capital at PricewaterhouseCoopers (PwC).

But that situation could change soon.

"In the second quarter, 36% of CEOs noted concerns about higher interest rates as a potential barrier to growth over the next 12 months, up from 29% in the prior quarter and 26% a year ago," relates Lefteroff.

The data are based on a PwC survey of CEOs of 301 media-identified fast-growing, privately held manufacturing and service companies. The companies surveyed had revenues ranging from about $5 million to $150 million.

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