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Saturday, January 11, 2014 9:34:28 PM
I know all about Lines of credit.
They can come in all forms,with all kind of collateral rules,covenants,etc....
But may point is this,It's simply always good business to assess the cost of capital.
Irrespective of what form it comes or in what business model it is used in.
And frankly,a 25% interest rate is high cost/high risk/default probable categorized financing.
"Don't get hung up in the cost of capital"?
Are you kidding me?
Apparently you've never been in business before.
Like I said,if the Business opportunity is as good as advertised,then at some point "conventional" financing will come knocking on their door.
Let me ask you this,Why in the world would you have to settle for Credit card level cost of money when you could be using other forms that cost half as much?
If they have to access this type of financing due to the "deemed" risk level their Business proposition contains,then so be it. Hopefully they are successful and can then graduate to more conventional financing.
Scoop
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