2 ms·
It does take less effort, but it sure doesn't diversify your risk very well. And if they are giving excellent rates, it makes you wonder if they really have su
by jjeaff 7y ago
It does take less effort, but it sure doesn't diversify your risk very well.
And if they are giving excellent rates, it makes you wonder if they really have such a surplus of money that they can't find enough good risks to loan smaller amounts to at much higher rates.
I think it's more, as you mentioned, getting in the good graces of someone that is going to be wealthy the rest of their life.
- charlesdm 7y agoYes, banks have too much money (I'm not even kidding here, they have too much money and not enough good transactions to lend money for). So if they find someone potentially great (think Elon Musk, Patrick Drahi, John Malone, or this guy) they are all over it. In all honesty, small businesses are super high risk. This is generally lower risk, because the legal / due diligence / etc will have been done better. Also the likelihood of plain fraud is less. It's a combination of both. At the end of the day, there are always things that need to be financed. That's whether you're worth a million or a billion. So might as well build up a good relationship. It's easier to establish those relationships with big accounts, but it's also a more competitive environment (so you need to give good rates and not waste time with bullshit offers -- like they often do in retail).