6 ms·

I understand that a C corp is its own legal entity, but from a risk management perspective, the bank’s approach makes perfect sense.

wpietri 4y ago
Which bank? There are two different banks here with very different risk management approaches.
- piva00 4y ago
  One is still standing, the other seems to be insolvent.
  - subroutine 4y ago
    Indeed, SVB is still standing while JP Morgan Chase got a $25 billion dollar bailout in 2008. https://money.cnn.com/news/specials/storysupplement/bankbailout/ https://money.cnn.com/news/specials/storysupplement/bankbail...
    - wpietri 4y ago
      And they are also so good at due diligence that they got scammed for $175 million: https://www.forbes.com/sites/alexandralevine/2023/01/11/jp-morgan-fake-customers-frank-charlie-javice/?sh=2822df2814d4 https://www.forbes.com/sites/alexandralevine/2023/01/11/jp-m...
subroutine 4y ago
How? I'm no banker, but to me their financial picture reads: married couple, both currently have nice salary working at companies X and Y, together have proven ability to raise millions in capital. I would say yes please take our refi loan, and do come back if you need anything else.
- trogdor 4y ago
  Why would a proven ability to raise millions in business capital (and, apparently, to subsequently hemorrhage it) make someone a better credit risk for their home mortgage? Their financial history includes borrowing lots of money, taking a big risk, and losing a lot of that money. Not necessarily bad, but it’s reality. Just because that activity happened under a different legal entity doesn’t make it irrelevant. The mortgage applicants own nearly all of the company that is losing tons of cash. It is an important part of their financial history.
  - kentonv 4y ago
    Raising capital and then burning it all is what most startups do. Investors put in money knowing this was the most likely outcome. The whole point of the C corp is to keep the investor money isolated from personal money. I'm disappointed that we failed but I think it shouldn't affect our personal credit one way or the other.

wpietri 4y ago

Which bank? There are two different banks here with very different risk management approaches.

piva00 4y ago
One is still standing, the other seems to be insolvent.
- subroutine 4y ago
  Indeed, SVB is still standing while JP Morgan Chase got a $25 billion dollar bailout in 2008. https://money.cnn.com/news/specials/storysupplement/bankbailout/ https://money.cnn.com/news/specials/storysupplement/bankbail...
  - wpietri 4y ago
    And they are also so good at due diligence that they got scammed for $175 million: https://www.forbes.com/sites/alexandralevine/2023/01/11/jp-morgan-fake-customers-frank-charlie-javice/?sh=2822df2814d4 https://www.forbes.com/sites/alexandralevine/2023/01/11/jp-m...

subroutine 4y ago

How? I'm no banker, but to me their financial picture reads: married couple, both currently have nice salary working at companies X and Y, together have proven ability to raise millions in capital. I would say yes please take our refi loan, and do come back if you need anything else.

trogdor 4y ago
Why would a proven ability to raise millions in business capital (and, apparently, to subsequently hemorrhage it) make someone a better credit risk for their home mortgage? Their financial history includes borrowing lots of money, taking a big risk, and losing a lot of that money. Not necessarily bad, but it’s reality. Just because that activity happened under a different legal entity doesn’t make it irrelevant. The mortgage applicants own nearly all of the company that is losing tons of cash. It is an important part of their financial history.
- kentonv 4y ago
  Raising capital and then burning it all is what most startups do. Investors put in money knowing this was the most likely outcome. The whole point of the C corp is to keep the investor money isolated from personal money. I'm disappointed that we failed but I think it shouldn't affect our personal credit one way or the other.