Cybersecurity has traditionally been treated as an IT and operational resilience issue. The focus has been on protecting systems, data and customers from disruption. But as cyber incidents become more frequent, interconnected and financially material, cybersecurity is increasingly becoming relevant to another part of the business: access to capital.
For businesses seeking debt, refinancing or acquisition finance, cyber risk can influence how lenders assess resilience, cash flow and the ability to service debt. A cyber incident does not need to result in a ransom payment to become a financial event. Operational downtime, lost revenue, remediation costs and working-capital pressure can all affect a company's financial position.
The question is therefore evolving from simply asking how secure a business is to understanding what its cyber exposure could mean financially, and how that exposure might be viewed by a lender.
An earlier working-paper version of Amy G. Sheneman's research, titled Cybersecurity Risk and the Cost of Debt and dated July 2021, examined 290 cybersecurity breaches between 2005 and 2018. It found that loans initiated after a breach carried spreads 30 basis points higher on average than loans initiated before a breach. The research was subsequently published in The Accounting Review as Cybersecurity Risk and Bank Loan Contracting.
Separately, a 2025 CEPR Discussion Paper by Bokmin Choi, Hans Degryse and Kristien Smedts, Do Lenders Price Firms' Cybersecurity Risks?, found that lenders charged, on average, 4–13 basis points higher loan rates when firms exhibited greater cybersecurity risk over time. The research also found that commercial banks imposed more financial covenants and monitored more intensively as firms became riskier.
These studies examine different samples, periods and measures of cybersecurity risk, so their findings should be considered in context rather than treated as a single universal "cyber risk premium". Together, however, they provide evidence that cybersecurity risk can influence the economics and structure of corporate borrowing.
For lenders, the connection is clear. A material cyber incident can disrupt operations, affect revenue, increase costs and put pressure on liquidity. If those effects impair a company's ability to service debt, cyber risk becomes relevant to credit assessment.
Cyber incident → operational disruption → financial impact → liquidity pressure → credit implications
This is where cybersecurity moves beyond an IT concern and becomes part of the wider capital conversation.
Ransomware often dominates discussions about cyber incidents, but the ransom itself may be only one component of the financial impact.
A significant incident can lead to lost revenue during operational downtime, emergency technology and incident-response costs, recovery and remediation expenses, customer or supplier disruption and increased working-capital requirements. For businesses carrying fixed operating costs or debt obligations, the duration of disruption can matter as much as the initial event.
Even a temporary interruption can create a mismatch between cash inflows and financial commitments. That can place pressure on liquidity, debt service and available covenant headroom at a time when management is already dealing with an operational crisis.
Understanding these potential cash-flow consequences is therefore an important part of assessing the financial resilience of a business before an incident occurs.
Cybersecurity can form part of the broader picture a lender considers when assessing a business. Depending on the company and the financing requirement, that assessment may include critical systems, recovery capabilities, third-party technology providers, previous incidents and remediation, cyber insurance, and the potential effect of prolonged disruption on revenue and cash flow.
No business can eliminate every cyber threat. The more relevant question for financing is whether management understands its material exposures, has credible recovery capabilities and can explain how a serious disruption could affect the financial position of the business.
This becomes particularly important where technology, data or digital infrastructure is central to revenue generation. In these businesses, cyber resilience is closely connected to business continuity and financial resilience.
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A company's cyber resilience cannot always be assessed by looking at its own technology. Third-party dependencies can create significant exposure even where internal controls are strong.
Verizon's 2026 Data Breach Investigations Report found that third-party involvement had increased by 60% year on year, reaching 48% of breaches in its dataset. The report also found that vulnerability exploitation accounted for 31% of breaches.
Cloud providers, software platforms, managed service providers and critical suppliers can all become points of disruption. An outage or compromise affecting a key provider can affect production, customer delivery, payments, data and day-to-day operations.
For management, this is a business continuity issue. For a lender, it can form part of the risk profile of the borrower.
Understanding cyber exposure therefore requires looking beyond a company's own systems to the external infrastructure that keeps revenue flowing.
The implications become particularly relevant when a business approaches a refinancing or new funding requirement.
A significant cyber incident could introduce uncertainty around revenue forecasts, EBITDA, liquidity, customer retention and debt service. The effect on financing depends on the nature and severity of the incident, the speed of recovery and the company's financial position.
Businesses should therefore understand how a material disruption could affect cash generation, working capital and debt obligations before entering an important financing discussion.
For management teams preparing for a refinancing, acquisition or growth funding requirement, this means being able to explain the measures in place to manage material cyber exposure and maintain financial resilience.
The 2026 cybersecurity environment reinforces the financial relevance of these issues. The Bank of England's July 2026 Financial Stability Report states that rapid advances in frontier AI have increased financial stability risks related to cyber and operational resilience. It highlights the ability of frontier AI models to identify and exploit software vulnerabilities at greater scale, alongside increasing dependence on third-party technology providers and the potential for more severe and fast-moving disruption.
For businesses, the implications extend beyond the immediate threat environment. Faster vulnerability discovery and greater dependence on shared technology providers increase the importance of understanding critical systems, third-party dependencies and recovery capabilities.
Cybersecurity should therefore form part of how a business thinks about resilience, liquidity and financing before an incident occurs.
Cyber risk is becoming capital risk. Businesses should be prepared to understand, quantify and communicate what that means for their financial position.
Understanding the relationship between operational risk, cash flow and capital structure is increasingly important when businesses are preparing for their next financing decision.
Fuse Capital is a Global Capital Solutions Advisory firm covering Debt, M&A and Restructuring. With $1bn+ in completed transaction value, 250+ transactions completed, 1,500+ global capital partners and 13+ years in private markets, we advise businesses and sponsors on complex capital and transaction requirements.
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Can cybersecurity affect the cost of business debt?
Research indicates that it can, although the effect varies according to the nature of the cyber risk, the company and the lending environment. Sheneman's research found higher spreads following cybersecurity breaches, while the CEPR study found higher loan rates among firms exhibiting greater cybersecurity risk.
Do lenders consider cybersecurity when assessing a business?
Cybersecurity can form part of a broader assessment of operational resilience, business continuity, cash flow and financial risk, particularly where technology or data is central to the business model.
Can a cyber incident affect a company's liquidity?
Yes. Operational disruption can reduce revenue while increasing remediation, response and working-capital costs. If the disruption is significant or prolonged, it can place pressure on liquidity and debt-service capacity.
Does cyber insurance eliminate financing risk?
Insurance can transfer part of the financial exposure associated with an incident, but it does not remove operational disruption or the need for effective recovery capabilities. The CEPR research also found that purchasing cybersecurity insurance did not mitigate the higher loan spreads associated with greater measured cybersecurity risk.