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packerfanbud

05/26/11 4:49 PM

#19308 RE: stluc #19305

You are correct. and in this case the leverage isn't cash it is oil. which is worth more every day
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CLP08

05/26/11 6:02 PM

#19313 RE: stluc #19305

No, the bank looks at the collateral, which in this case would be the oil reserves...correct? I recently purchased a house post housing bubble and obviously it's not the exact same process for a business deal, but still. My loan wasn't for 700,000 and I had more than 22 in the bank, but still it was about how much the house that I was purchasing was worth and if I could reasonably make the payments.