what happens if there is no credit?

[cool hand]

just wondering?

[RandomGuy]

Then a lot of businesses start folding.

Consider:

You have, say, a small business cleaning vacant apartments after tenants vacate.

You require a vehicle and some supplies, but otherwise have no overhead.

Now your vehicle transmission literally falls out on the roadway.

You need $2000 RIGHT NOW to fix the vehicle, to be able to continue business past next week.

If you don't get a short term loan, what happens to your business? POOF.

[RandomGuy]

Consider:

You run a small manufacturing company.

You pay out for raw materials and parts, and have terms of about 15-45 days with your suppliers, allowing you to sell what you made from the materials/parts and use that money to repay your suppliers.

Now imagine one of those suppliers has some small crisis and its ability to forgo payment for 45 days goes away.

It now demands to be paid up front.

You don't have the cash to pay that, because your money is all tied up in the goods on the shop floor.

You have no choice but to go to a bank and ask for some quick credit, or you have no more raw materials.

No raw materials= no finished goods = no revenue = no profits.

[cool hand]

Feyu2Db2QuU

[ducks]

just wondering?
you live by what you can afford not what you want

[cool hand]

Consider:

You run a small manufacturing company.

You pay out for raw materials and parts, and have terms of about 15-45 days with your suppliers, allowing you to sell what you made from the materials/parts and use that money to repay your suppliers.

Now imagine one of those suppliers has some small crisis and its ability to forgo payment for 45 days goes away.

It now demands to be paid up front.

You don't have the cash to pay that, because your money is all tied up in the goods on the shop floor.

You have no choice but to go to a bank and ask for some quick credit, or you have no more raw materials.

No raw materials= no finished goods = no revenue = no profits.


better have good credit then....like it used to be.

[cool hand]

you live by what you can afford not what you want



damn right.

[RandomGuy]

Consider:

You have a great idea for something.

You know that this thing is a worthwhile idea, but you don't have the cash to start manufacturing this item.

You decide to go to a bank. They aren't lending.

What happens to this idea?

Pfft.

[Shastafarian]

you live by what you can afford not what you want

You're an idiot. Any business owner that doesn't have cash on hand to pay their workers is shit out of luck. That means people are gonna lose their jobs. Why don't you take your head out of your ass for once.

[ducks]

people who do jobs for the gov run out of money while waiting for the gov to pay them

[RandomGuy]

better have good credit then....like it used to be.

Economic downturns hit even people with good credit.

The company above never once failed to pay their suppliers on time and still took it in the shorts.

[ducks]

You're an idiot. Any business owner that doesn't have cash on hand to pay their workers is shit out of luck. That means people are gonna lose their jobs. Why don't you take your head out of your ass for once.

I was talking about the average joe
not the small business owner

any person with a decent iq would know that

[hater]

you live by what you can afford not what you want

that statement is a joke in the business world. and has been for decades

[cool hand]

^then you need to contract......period, you are living(buisnessing)out of your intial buisness plan.......better get cold, hard cash before you try and run a business.

[ducks]

that statement is a joke in the business world. and has been for decades

no kidding
but it is the presidents fault we are in this mess:bang:bang:bang:downspin::downspin:

[Spur-Addict]

you live by what you can afford not what you want

If only this happened (Market situation) around the time of the Repub. primary, R. Paul would have looked genius to the common man.


Feyu2Db2QuU

Yup, he freaked that. Kudos.

[ducks]

^then you need to contract......period, you are living(buisnessing)out of your intial buisness plan.......better get cold, hard cash before you try and run a business.

how buy selling illegal drugs:downspin:

[Shastafarian]

I was talking about the average joe
not the small business owner

any person with a decent iq would know that

Then clarify that while it's a restrictive force on working people, it's also a death null for business owners.

[SnakeBoy]

Bad question. There will be credit. There just won't be credit to people who can't prove they can pay it back.

The scare tactic that banks will cease to exist is pure fantasy.

[cool hand]

yep^

[cool hand]

the market is scared to death that they will have to actually have to sell things closer to the amount they are actually worth.........I can't wait for the market adjustment on a new 60"LCD 1080p HDTV.........maybe around Jan.

[boutons_]

I read where small businesses with good credit can get loans. but if there is any question on the credit, no dice

it's the banks and finance industry who have no trust in each other, seeing lehman, bear, wamu, merril, indymac, etc, bite the dust. And with no transparency, nobody knows how exposed anybody else is, so that's frozen.

[Indazone]

If there is no credit, no 30 day terms, nothing to borrow then companies cannot pay workers, cannot buy goods, cannot purchase raw materials.

Bankruptcy and loss of jobs for everyone.

[AFBlue]

No credit means less revenue for business, which means cutting costs to break even, which means lost jobs, which means even less money injected into the economy....and so on and so forth as the cycle repeats itself.

Basically, with no credit our economy would stumble and we would enter a long-term recession. Even with significantly less credit the economy would suffer.

[Shelly]

people who do jobs for the gov run out of money while waiting for the gov to pay them

Ducks speaks the truth on this one. We are subs to contractors on government jobs and they are the slowest paying. Contractors WILL NOT pay you until they get paid. Because of this, we go way beyond our vendors terms of Net 30. I have to make sure my payroll, payroll taxes, insurances, unions and basically all operating bills get paid first.