Lower Your Company's Borrowing Costs - Holdings Blog: Expert insights on business banking, financial management, and growth strategies for entrepreneurs. Discover why Holdings is the best business bank for your company's success.

Lower Your Company's Borrowing Costs

Jun 24, 2023

In today's high-interest rate environment, savvy businesses are finding innovative ways to offset borrowing costs. At Holdings, we're all about helping you maximize your company's financial potential. Let's explore using a high-yield cash account to significantly reduce your effective borrowing rate.

The Power of Strategic Cash Allocation

Imagine this scenario:

  1. Your company borrows $1 million at a 10% interest rate.

  2. Annual interest expense: $100,000

  3. Deposit that $1 million into a Holdings Cash Account, earning 4% APY.

  4. Annual interest earned: $40,000

The Bottom Line: Slashing Your Effective Borrowing Cost

You've reduced your effective annual borrowing cost by leveraging a high-yield cash account from $100,000 to $60,000. That's a 60% reduction!

Why This Strategy Works

  1. Capital Efficiency: Your borrowed funds are no longer idle – they work for you.

  2. Risk Mitigation: With FDIC insurance up to $5 million, your capital remains safe and secure.

  3. Liquidity: Unlike investments in securities, our same-day transfers ensure your funds are always accessible when needed.

Ready to Optimize Your Borrowing Strategy?

Don't let high interest rates eat into your profits. With a Holdings Cash Account, you can turn borrowed funds into a financial opportunity. It's time to put your cash to work and watch your effective borrowing costs plummet.

Open your Holdings Cash Account today and start slashing those borrowing costs!

Disclaimers and footnotes

© 2023-2024 Holdings Financial Technologies Inc. All rights reserved. Holdings is a financial technology company, not a bank. Banking services provided by Evolve Bank & Trust, Member FDIC

Funds deposited in your Holdings account are held by Evolve Bank & Trust, Member FDIC. The standard deposit amount is $250,000 per depositor, per insured bank, for each account ownership category. Through Evolve's Sweep Program, funds may be eligible for up to $5M in FDIC insurance. Find additional information about the Sweep Program here