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Companies Stash Cash


Frontier -- Trends

Companies Stash Cash

Despite a recent series of interest-rate hikes, CEOs of fast-growth companies are taking out more new bank loans as a hedge against an anticipated drop in demand.

Companies that make tangible products are especially worried. In that sector, 29% of CEOs told PricewaterhouseCoopers they had completed new bank loans in the third quarter, compared with 21% last quarter. Only 23% of service-sector companies took out new bank loans in the quarter, up slightly from 22% last quarter. In either case, the new loans are hardly what you'd call a bargain: Companies reported paying an average of 9.88%, up from 8.49% a year ago. For many product companies, slowing demand already is a fact of life: 36% of product companies said they were holding finished inventory at the end of last quarter, up from 23% in the second quarter.Edited by Kimberly Weisul


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