Jun
29
Why do people think successful businesses need to borrow money to keep running?
Filed Under Government
Princess Palin
Excuse me, but a business that has to borrow money to keep in business is a business that is doomed to fail, borrowing money just prolongs the agony and will lead to bankruptcy, leaving the people who made the loans in the cold and out of their money.
Excuse me, but a business that has to borrow money to keep in business is a business that is doomed to fail, borrowing money just prolongs the agony and will lead to bankruptcy, leaving the people who made the loans in the cold and out of their money.
Wall Street is no exception.
If you loan money to a deadbeat bum, you can expect to never get your money back.
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4 Responses to “Why do people think successful businesses need to borrow money to keep running?”
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You are what we call a lunch box Johny who has no idea how a business is run
I bet the farm you say to yourself ”I sold 200 big macs at $1.50 each in that time they paid me $10 those greedy S O B’s made $290 off me
Watch the video. Gov’t backed institutions that made subprime loans are to blame. All started by Clinton. Just watch….
Tyler Durden: Man, I see in fight club the strongest and smartest men who’ve ever lived. I see all this potential, and I see squandering. God damn it, an entire generation pumping gas, waiting tables; slaves with white collars. Advertising has us chasing cars and clothes, working jobs we **** so we can buy ship we don’t need. We’re the middle children of history, man. No purpose or place. We have no Great War. No Great Depression. Our Great War’s a spiritual war… our Great Depression is our lives. We’ve all been raised on television to believe that one day we’d all be millionaires, and movie gods, and rock stars. But we won’t. And we’re slowly learning that fact. And we’re very, very pissed off.
The company I work at is an example. We buy titanium forgings at a cost of $100,000 – $200,000 each then spend several months machining and processing them into aircraft parts. We generally do not get paid for them until 30 days after they hit the customers receiving dock.
During this entire time we have to meet payroll, pay the utilities and all of the other expenses of operating a business. As a result the company gets short term loans (3 to 4 months) then pay them off after we get paid for the parts.
Operating in this manner allowed the owners to spend the ~1 million that would otherwise be tied up on ‘Work In Process’ and instead invest in more production capacity (this created 20 new jobs).
Now that it is uncertain if these loans will be available in the future our company will probably scale back this operation. The General Manager is going to make the announcement tomorrow that there will be no more overtime and no new hiring until we know what is going to happen.