The interest rate a company pays on loan depends in part on

the extent to which its default risk ratio is above$/$below $3\mathrm{.}0.$

its current ratio, debt$-$asset ratio, and operating profit as a percentage of global sales revenues.

whether its credit rating is above or below a $B$ rating$--$all loans made to companies with a $B$ or lower rating are made at prime plus $3\mathrm{.}5\%,$ while loans to companies with a credit rating of $B+$ or above are made at prime plus $1\mathrm{.}5\%[$prime is defined as the "base" or "lowest" interest rate that creditors charge very low$-$risk customers who put up $200\%$ or more collateral$]$

its credit rating and the length of the term of the loan $(1-$year versus $5-$year versus $10$year$)--$the longer the payback period, the higher the interest rate.

its debt$-$equity ratio and interest coverage ratio in the prior year.

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