It's the borrowing money with options to pay their day-to-day operations that makes it similar to a payday loan. Yes, they are huge, which means the terms are extremely favorable, but the announcement of this loan and its lack of collateral terrible signs.
Lack of collateral is the most favorable term there is. Collateral is what you use when someone isn’t sure you’ll pay them back. You say ”okay, well if I fail to pay back [this car loan], you can take [the car] and keep any of the money I did pay you.”
If a bank is giving someone an unsecured loan, they are supremely confident that they will get their money. It’s the single greatest indicator of confidence in financial health and reliability possible.
And before you come in with “muh payday loans are unsecured,” payday loans are an entirely different animal. They’re designed to exist for people who can’t offer collateral because they’re so desperate for a relatively small sum of cash they don’t have a proper form of collateral they can put up. The terms are extremely short, usually month-to-month or even week-to-week intending only to last to the borrower’s next paycheck, and are usually known for extremely high interest rates (because this high return on investment is how lenders compensate for the risk).
To call this a payday loan is to compare a set of terms, cash amounts, and entities involved so different that you may as well be saying “Amazon is in trouble because they had to take out a loan to build a data center, but my buddy just bought a laptop and paid cash.”
There is a low-interest loan with an option to extend it and increase the interest. Big corporations issue stock/debt options to high dollar investors or funds for shit like this, not take out loans.
No, investors are the most expensive way to raise funds. Debt is the cheapest. All major corporations hold a debt-to-equity ratio that is considered reasonable for their industry.
The reason for this often comes down to the tax savings on interest but also because interest rates tends to be lower than the expected return on equity.
The interest rates are not important, it is the style of loan and options attached that are. Seeking new investors is good, it shows you are growing. Taking out unsecured debt is a redflag.
Unsecured debt is the best debt to take out if you can. What matters is in fact the rate. The only reason to secure something is to get a better rate or because your lender requires it. You don't even want secured debt if you can avoid it. If amazon is getting a good interest rate on unsecured debt that means amazon is strong enough to force lenders to not require collateral which is a good sign. It's when businesses start offering up all their assets as collateral for debt you should start to worry.
I work in banking... I know what I'm talking about. You're just trying to find something to get all alarmed over. This is literally nothing.
And finding investors is the most expensive way to raise money because it dilutes the equity of existing investors at a rate equal to the expected rate of return on the equity (what investors expect to earn as a return on their investment). That rate of return tends to be around 10% for average companies on the stock market and probably around 12% for Amazon using rough numbers. The cost of equity tends to be considerably higher than the cost of debt.
Amazon is a chinese dollar store that has made its billions from selling cheap fake shit. Their cloud software is openly monitored and controlled by both the CCP and alphabet agencies. Their business management practices are never going to be trustworthy.
A spread of 0.75% is the complete opposite of of a payday loan.
Amazon has the ability to make nations dance for its business.
The banks probably did the same thing
It's the borrowing money with options to pay their day-to-day operations that makes it similar to a payday loan. Yes, they are huge, which means the terms are extremely favorable, but the announcement of this loan and its lack of collateral terrible signs.
Lack of collateral is the most favorable term there is. Collateral is what you use when someone isn’t sure you’ll pay them back. You say ”okay, well if I fail to pay back [this car loan], you can take [the car] and keep any of the money I did pay you.”
If a bank is giving someone an unsecured loan, they are supremely confident that they will get their money. It’s the single greatest indicator of confidence in financial health and reliability possible.
And before you come in with “muh payday loans are unsecured,” payday loans are an entirely different animal. They’re designed to exist for people who can’t offer collateral because they’re so desperate for a relatively small sum of cash they don’t have a proper form of collateral they can put up. The terms are extremely short, usually month-to-month or even week-to-week intending only to last to the borrower’s next paycheck, and are usually known for extremely high interest rates (because this high return on investment is how lenders compensate for the risk).
To call this a payday loan is to compare a set of terms, cash amounts, and entities involved so different that you may as well be saying “Amazon is in trouble because they had to take out a loan to build a data center, but my buddy just bought a laptop and paid cash.”
I just browsed their Q3 statements. They are pretty healthy. Just normal borrowing. Nothing alarming going on.
Silly, rabbit, tricks are for investor reports.
There is a low-interest loan with an option to extend it and increase the interest. Big corporations issue stock/debt options to high dollar investors or funds for shit like this, not take out loans.
No, investors are the most expensive way to raise funds. Debt is the cheapest. All major corporations hold a debt-to-equity ratio that is considered reasonable for their industry.
The reason for this often comes down to the tax savings on interest but also because interest rates tends to be lower than the expected return on equity.
The interest rates are not important, it is the style of loan and options attached that are. Seeking new investors is good, it shows you are growing. Taking out unsecured debt is a redflag.
Unsecured debt is the best debt to take out if you can. What matters is in fact the rate. The only reason to secure something is to get a better rate or because your lender requires it. You don't even want secured debt if you can avoid it. If amazon is getting a good interest rate on unsecured debt that means amazon is strong enough to force lenders to not require collateral which is a good sign. It's when businesses start offering up all their assets as collateral for debt you should start to worry.
I work in banking... I know what I'm talking about. You're just trying to find something to get all alarmed over. This is literally nothing.
And finding investors is the most expensive way to raise money because it dilutes the equity of existing investors at a rate equal to the expected rate of return on the equity (what investors expect to earn as a return on their investment). That rate of return tends to be around 10% for average companies on the stock market and probably around 12% for Amazon using rough numbers. The cost of equity tends to be considerably higher than the cost of debt.
https://www.investopedia.com/ask/answers/032515/what-difference-between-cost-debt-capital-and-cost-equity.asp
You're thinking on small terms.
Amazon has been very shrewd and tactical in their funding.
Complete opposite of payday borrowing.
你当然是对的。 亚马逊完全光明正大,从他们的商业“云”软件到他们著名的市场经销商。 好好生活吧,高贵的猪妖。
ni hao
Amazon is a chinese dollar store that has made its billions from selling cheap fake shit. Their cloud software is openly monitored and controlled by both the CCP and alphabet agencies. Their business management practices are never going to be trustworthy.