Borrowing costs can change while a company’s customer contracts remain fixed. Rajeev Khandelwal’s documented structured-finance experience makes that mismatch a relevant part of his professional landscape. The issue is not simply whether rates rise or fall. It is how quickly the change reaches the borrower, which facilities are affected and what room the operation has to absorb the resulting cash requirement.
Identify the reset dates
Different loans can reprice on different schedules. A company may therefore experience a gradual increase in interest rather than one immediate adjustment. The cash forecast should reflect each facility’s mechanics and payment dates. This is particularly important where a business has accumulated several borrowing arrangements over time, leaving management with a blended average cost that obscures the sensitivity of individual facilities to changing funding conditions.
Separate margin from cash
Higher interest may reduce earnings, but the timing of actual payments determines liquidity pressure. A seasonal business can face increased financing costs during its weakest collection period. Management should consider that overlap when setting buffers and dividend expectations. The financing discussion becomes more practical when it shows the months in which additional interest must be paid rather than only its effect on annual profit.
Assess commercial responses
Passing higher funding costs to customers may be possible for some products and difficult for others. Cutting inventory can release cash but damage service levels. Delaying capital expenditure may preserve liquidity while reducing future competitiveness. These choices should be evaluated together. An interest sensitivity becomes useful when it leads to realistic operating responses, not merely a table showing that profit falls as the borrowing rate increases.
Keep financing adaptable
Credit Connect’s debt advisory offering sits alongside Rajeev’s wider capital experience. Interest repricing demonstrates why financing terms should be read against the company’s commercial model. A useful structure balances cost, certainty and flexibility, with management understanding the consequences of each choice. The objective is to preserve the ability to operate and invest under a range of funding conditions rather than rely on one favourable interest assumption.
