Daily News: May 15, 2012

CFO: The High Price of Cheap Debt

In an opinion piece appearing on CFO.com, Scott Berquist at Silicon Valley Bank notes leverage can be a powerful tool, but optimizing its application requires some calculus of cost versus benefit. The traditional reference to debt as “leverage” is certainly appealing. Much like a simple tool can help a person lift twice as much weight, adding term debt or a revolving credit facility can lift a transaction size or working-capital liquidity beyond what precious equity capital can achieve alone.

Finding that perfect, simple leverage tool is critical to a company