Sunday, August 15, 2010

You would be amazed at who needs guaranteed loans

You wouldn't believe who needs guaranteed loans

Personal finance and high corporate finance are not as different as you may think. The corporations which need some guaranteed loans at a while, or at least a line of credit in case they need a short term loan are some of the biggest names out there. Even the Ford Motor Company got guaranteed loans at some time. Ford is in debt relief mode. Meanwhile, Freddie Mac and Fannie Mae need more guaranteed loans to stay afloat.

Guaranteed loans for Ford

To keep from needing bailout cash and filing for bankruptcy, Ford Motor Company took out $ 23.5 billion in guaranteed loans from the government. During the auto bailout, Ford didn’t need any auto loan application, but merely asked for lines of credit as a contingency. It turned out not asking for emergency money from the government at that moment panned out. As Chrysler and GM tried to figure things out, as outlined by the Wall Street Journal, Ford saw a 22 percent jump in sales. Sometimes just knowing you have the access to credit is a confidence boost, if you absolutely need a loan until payday.

Mortgage giants need more guaranteed loans

Meanwhile, Fannie Mae and Freddie Mac need more guaranteed loans from the government in order to stay solvent. Freddie alone lost $ 6 billion over the second quarter this year, according to ABC. The cash hemorrhaging firm is asking for one more $ 1.8 billion from taxpayers. The twin mortgage giants are struggling, and both have less than two years to get their affairs in order. That’s when the Treasury Department’s teat will run dry.

Credit scores affect huge companies too

Ford could be able to get better loans, as they pay off debt and improve the company’s credit worthiness. It is like an individual paying down their credit card to improve their credit history; it works for the biggest corporations too.

Additional reading

online.wsj.com/article/SB20001424052748703589404575417491742322262.html

abcnews.go.com/Business/wireStory?id=11356950



No comments: