Cost of Financing

SMEs often focus on maximizing their revenue and/or reducing their operating costs but neglect to look at their cost of financing. What good is it for your shareholders if they are to receive less return compared to what other similar businesses, with similar risk, can offer? Similarly, would you enter into a new venture if it promises less return than what your cost of funds is? This module allows a business owner to estimate this cost. After selecting their industry and entering some of their own company’s data, the module will generate an estimate of their cost of financing, and compare it to their current returns. This estimate of their cost can also be used in the Investment module as the rate to discount forecasted cash flows.