Spongetech Delivery Systems Inc (fka SPNGQ)

[pantherj]

I believe it will prove exactly the opposite. If the business was good and the margins were high enough to to grow the business even under the weight of high capital costs, the question then becomes; "Why do this at all? It seems short sighted and unnecessary." Its a desperation move. Clearly no business would pay this kind of interest for working capital IF they could get money through traditional sources. The conclusion is that SPNG cannot access traditional capital markets and, therefore, must use the business form of "Payday Loans."

Business doesn't survive by doing things just because they can afford to do them. It survives by using capital and resources at the lowest cost possible to generate more capital and resources. Factoring is the worst, highest cost capital available.