In certain scenerios, some companies may choose to finance with a bank loan specifically because of the deductibility of interest. It could lower their taxable income enough (assuming it is not a corporation at the current 21% flat rate) to put them in a lower tax bracket. This means they could end up paying less money after interest and taxes are paid.
It is interesting that bank interest could be utilized as a cash flow strategy!
Do you think this is something many finance managers may consider?
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