The main reason the Fed is cutting rates is to spur borrowing and economic spending. In response, the commercial banks are cutting the prime rate from 5.25% to 5% (USA TODAY, 1 May 2008). This means that the cost of debt for businesses should be on the decline.

However, the credit crisis caused by the collapse of the sub-prime lending market has banks tightening their lending policies. In the past few months, we have been told by several loan officers and other bankers that banks are just not doing many deals right now. It seems to me that the Fed's actions are having no real affect on getting borrowed funds into the hands of businesses. The borrowed funds that their customers already have are just cheaper. A knowledgable CFO consultant can help you with acquiring financing.