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I run a small SAS company and consult for another medium sized O&G company. The amount of debt I am offered to take on every day is staggering. The O&G company

I run a small SAS company and consult for another medium sized O&G company. The amount of debt I am offered to take on every day is staggering. The O&G company recently took a $200k loan with little to no proof of income, collateral, or anything else. I know of some other small companies with MILLIONS in debt and absolutely 0 collateral to back it up. In the event of insolvency the lender will just soak the loss.

hn_throwaway_99 8y ago
Obstetrics and Gynecology?
- deleted 8y ago
  [deleted]
- sokoloff 8y ago
  Oil and Gas
01100011 8y ago
The O&G company has no assets(land, equipment, mineral rights, signed contracts, etc)?
digitaltrees 8y ago
Is the debt on favorable terms or is it really high interest?
elliotec 8y ago
I work for a fintech company that is in the business of small/medium business credit and financing, and this is a very surprising thing to hear. My understanding is the majority of our customers are struggling to establish business credit and get decent financing, especially if they haven't been in business long and/or don't have high revenue streams. Do the companies you mention have decent revenue, even if they also have debt?? Your situation is one many of our customers would love to be in.
- rfc 8y ago
  Echo this. We have collateral, revenue, decent profit margins, and significant YOY growth (over 500%) and it's been difficult to get a loan or LOC due to how young we are. We finally got one for a small $10k LOC which is funny because our company credit card is many times larger than that. Gotta start somewhere though...
  - duxup 8y ago
    Struggling to get a 10k loan... like just as an individual that should be pretty easy for me to get at the drop of a hat. Odd a business would struggle to get something that small.
    - cthalupa 8y ago
      > Odd a business would struggle to get something that small. It being that small is part of the problem. Your potential ROI for a 10k loan with anything resembling a normal rate is pretty small. There's not much money to be made, which means there's little incentive to take risks.
      - duxup 8y ago
        I should have thought of that as a relative founded a small local bank ages ago. They got bigger and he always talks about how they'd bring in a new loan executive dude and he'd be all "Oh man look at these tiny loans, these aren't cost effective." And then they'd have to teach him that those tiny loans are how they grow / maintain their business with the local businesses, and farmers. They're small but doing things efficiently, safely (risk wise), but also quickly is how they gain the locals trust and loyalty. Big banks show up and are all "naw we don't do that" and just don't catch on with the locals. At least in the areas that their branches operate it has been effective for decades, the locals in those areas really like local banks, other places maybe not so much.
    - moccachino 8y ago
      A company can go under in two seconds with all the assets gone and the lenders will have to suck it up. An individual has to struggle with bankruptcy laws for a decade or more to get rid of the debt. So if I've got 10k to loan, I'd rather loan it to some poor sucker that I then own, rather than to a business that might disappear tomorrow.

hn_throwaway_99 8y ago

Obstetrics and Gynecology?

deleted 8y ago
[deleted]
sokoloff 8y ago
Oil and Gas

01100011 8y ago

The O&G company has no assets(land, equipment, mineral rights, signed contracts, etc)?

digitaltrees 8y ago

Is the debt on favorable terms or is it really high interest?

elliotec 8y ago

I work for a fintech company that is in the business of small/medium business credit and financing, and this is a very surprising thing to hear. My understanding is the majority of our customers are struggling to establish business credit and get decent financing, especially if they haven't been in business long and/or don't have high revenue streams. Do the companies you mention have decent revenue, even if they also have debt?? Your situation is one many of our customers would love to be in.

rfc 8y ago
Echo this. We have collateral, revenue, decent profit margins, and significant YOY growth (over 500%) and it's been difficult to get a loan or LOC due to how young we are. We finally got one for a small $10k LOC which is funny because our company credit card is many times larger than that. Gotta start somewhere though...
- duxup 8y ago
  Struggling to get a 10k loan... like just as an individual that should be pretty easy for me to get at the drop of a hat. Odd a business would struggle to get something that small.
  - cthalupa 8y ago
    > Odd a business would struggle to get something that small. It being that small is part of the problem. Your potential ROI for a 10k loan with anything resembling a normal rate is pretty small. There's not much money to be made, which means there's little incentive to take risks.
    - duxup 8y ago
      I should have thought of that as a relative founded a small local bank ages ago. They got bigger and he always talks about how they'd bring in a new loan executive dude and he'd be all "Oh man look at these tiny loans, these aren't cost effective." And then they'd have to teach him that those tiny loans are how they grow / maintain their business with the local businesses, and farmers. They're small but doing things efficiently, safely (risk wise), but also quickly is how they gain the locals trust and loyalty. Big banks show up and are all "naw we don't do that" and just don't catch on with the locals. At least in the areas that their branches operate it has been effective for decades, the locals in those areas really like local banks, other places maybe not so much.
  - moccachino 8y ago
    A company can go under in two seconds with all the assets gone and the lenders will have to suck it up. An individual has to struggle with bankruptcy laws for a decade or more to get rid of the debt. So if I've got 10k to loan, I'd rather loan it to some poor sucker that I then own, rather than to a business that might disappear tomorrow.