Financing Cost Savings

Financing Cost Savings

A source of competitive advantage that depends on access to low cost sources of capital.

Financing Cost Savings

The act of gaining a competitive advantage in business because of access to low-cost capital. For example, if two competing firms both borrow $1 million for operating expenses, but Firm A secured a 4.5% interest rate while Firm B had to settle for 8%, then Firm A has financed cost savings with respect to Firm B.