Lending Down Thanks To Good Cash Flow

Jan. 13, 2005
America's fastest-growing companies borrowed less in the third quarter because of increased cash flow, and less activity by high-tech firms, according to Coopers & Lybrand's latest "Trendsetter Barometer." The study surveyed CEOs of 441 product and ...

America's fastest-growing companies borrowed less in the third quarter because of increased cash flow, and less activity by high-tech firms, according to Coopers & Lybrand's latest "Trendsetter Barometer."

The study surveyed CEOs of 441 product and service companies, half of which are recognized as high-tech firms. The surveyed companies range in size from $1 million to $50 million in revenue/sales and are considered to be the fastest growing U.S. businesses.

Although the prime rate to borrow has increased, from 8.25% to 8.5%, Coopers & Lybrand attributed the lending slowdown to high-tech growth firms. Only 27% completed bank loans during the third quarter (34% obtained loans the previous quarter). "Ironically, although there are significantly fewer high-tech firms borrowing, they paid lower rates for their loans than their non-tech peers, 9.26% vs 9.35%, or 9 basis points less," says Warren Martin, national high-tech partner, Coopers & Lybrand LLP.

Good fortune's abound, the amount that growth firms did borrow was notably less.

"Trendsetter" firms decreased their composite credit by 28%. "Credit development by high-tech growth firms spiked in the previous quarter, possibly contributing to a lessened need right now," says Martin. Other possible reasons: declined use of non-traditional financing, and self-financing.

Popular Sponsored Recommendations

Navigating Disruption: A Leader’s Guide to Strategy Under Uncertainty

Nov. 1, 2023
AI, sustainability, digital--industrials are facing disruptive forces that are redefining what it takes to win. What got your company where it is today won’t get you where you...

Powering Up Productivity: The Transformative Power of AP Automation in Manufacturing

Oct. 25, 2023
Discover how AP Automation is revolutionizing the manufacturing industry, driving efficiency, cost savings, and security. In today's world, automation is the key to staying competitive...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

What Is the Next Step in Your 3D Printing Strategy?

July 11, 2023
Cutting-edge 3D printing solutions let you explore more ideas, create working prototypes in hours and enable bridge manufacturing and mass customization.

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!