Hemi Energy Group Inc. (fka HMGP)

[Argyll]

I'm assuming it's HMGP's CD as HMGP bought the truck.

This doesn't have anything to do with shares.

The point I wanted to make is that the 1.5% is a bit misleading. It's a CD-secured loan at 6%.

The actual loan is about 6% and they have a CD in the amount at 4.5%. Initially, HMGP is paying 1.5% more than they are making from the CD. However, as the loan goes down, presuming HEMI has no problem paying it off out of income, they could actually be making a profit, i.e say in a year the loan is $50,000 and the CD is at $78,000...they will be making more interest from the CD than they are paying on the loan even though the loan is 6% and CD 4.5% -- the loan amount goes down considerably while the CD amount goes up slightly. And, of course, they won't fall into debt because the loan could be paid off any time with the CD.

I've done this myself (with $5000 once) primarily to establish credit. If you can make the loan payments out of income and the interest rates are close enough (which they usually are with CD secured loans) you can actually make a little money.

Banks will make loans at very low interest rates if they are secured by CDs in the same bank.