GERS... Almost all the early funding was done that way? With any kind of a Tech product especially, the road to production leaves most P-Co's with nowhere else to go to get the few thousand Dollars here and a few thousand dollars there!
Those lenders are usually Vultures who will bargain their way to an especially high toll on the P-Stock Co', who has only them to count on to keep the products moving ahead, though ever so slowly!
It is called toxic for that reason alone, as the P-Co' has to pay the loaners back many times over what the conventional loaners charge! But what conventional Bank would take on such high risk Co's such as P-Stock Companies? None, and I mean NONE! It seems like treachery yes, but Gers, and just about all other Penny Stocks have to travel that route!
Vulture Loaners have to charge ridiculous interest charges because they lose out most of the time, a great percentage of the time, so they have to make-up for those losses by doing what most on the board are doing? Taking our chances on the best bet available, and even with the best calculations, they, like us, have to wait it out until one winner, or two, materialize where they can get back some of their losses, though most P-S Co's do pay back some, or all of their debt as time goes by!
I don't know the full story of how Loaners operate, and each has its own way of negotiating Loan deals, but that basic premise I think holds true, that we are too often SUCKERS to what those Co's demand, and that is the fact of the matter IMO? Toxic, but not always fatal, but small Co's have to consider their Borrowings seriously, for their Company can be taken away from them if things don't go right? GL..
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