COmpany fails due to no credit

[SigArms08]

Originally posted by: Skoorb

Originally posted by: dmcowen674

Originally posted by: Specop 007
Looks like heres an example of a company that (supposedly) couldnt make payroll due to the tightening credit.

Topic Title: Company fails due to no credit

No company should be relying on credit to make payroll.

That is not a company.

And yet you've probably worked for dozens that operated like that.

And yet you seem fine with crucifying the US auto industry without knowing jack.

 

[Capt Caveman]

Originally posted by: RichardE

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Many companies use credit lines for payroll, as they ship out products which are paid in 30-60 days. Banks are pulling credit lines due to the credit crunch.

Correct. Credit Lines to buy product, raw materials, payroll, etc.

The ignorance is strong with some folks here.

 

[ViRGE]

Originally posted by: DrPizza
Oh nooooo! I hope that's not the brand we buy. We let little kids feed the unfrosted version as snacks to our goats. Time to go out and stock up on a couple cases.

If you feed animal cookies to an animal, is that cannibalism?

 

[Budarow]

Originally posted by: dmcowen674

Originally posted by: Specop 007
Looks like heres an example of a company that (supposedly) couldnt make payroll due to the tightening credit.

Topic Title: Company fails due to no credit

No company should be relying on credit to make payroll.

That is not a company.

Exactly. There are going to be a lot of "non companies" folding since they have been living on credit for several years to carry them. Now they have to pay the debt back with little hope of re-issueing more commercial paper to keep the revolving credit con going.

This whole thing is a mess and we'll see Dow 5,000 within 12 months. Could be way off on the timing though since I said this past Monday we'd see Nasdaq 1,750 within a month and it only took 3 days.

 

[Dissipate]

Originally posted by: Budarow
This whole thing is a mess and we'll see Dow 5,000 within 12 months. Could be way off on the timing though since I said this past Monday we'd see Nasdaq 1,750 within a month and it only took 3 days.

You got money riding on that prediction?

 

[smack Down]

Originally posted by: LegendKiller

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Companies where cash comes in every day but paychecks get sent out in one lump sum. In other words, a lot of companies.

You would think that in 92 years of operations the company could have saved 2 weeks of payroll.

This is just another result of the Feds piss poor interest rate policy of cutting rates to 1% so no one could afford to save and the banks had to be leveraged 30:1 to make profitable loans.

 

[RichardE]

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Companies where cash comes in every day but paychecks get sent out in one lump sum. In other words, a lot of companies.

You would think that in 92 years of operations the company could have saved 2 weeks of payroll.

This is just another result of the Feds piss poor interest rate policy of cutting rates to 1% so no one could afford to save and the banks had to be leveraged 30:1 to make profitable loans.

How do you know they hadn't saved 2 years of payroll and just finally ran out? As was said earlier, its common for credit lines to be used for payroll.

 

[LegendKiller]

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Companies where cash comes in every day but paychecks get sent out in one lump sum. In other words, a lot of companies.

You would think that in 92 years of operations the company could have saved 2 weeks of payroll.

This is just another result of the Feds piss poor interest rate policy of cutting rates to 1% so no one could afford to save and the banks had to be leveraged 30:1 to make profitable loans.

How did Japan maintain one of the highest saving rates in the world with such low interest rates?

What type of job do you have SD? Have you ever even taken an accounting or corporate finance course? Do you even understand how companies operate?

 

[smack Down]

Originally posted by: LegendKiller

Originally posted by: smack Down

Originally posted by: LegendKiller

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Companies where cash comes in every day but paychecks get sent out in one lump sum. In other words, a lot of companies.

You would think that in 92 years of operations the company could have saved 2 weeks of payroll.

This is just another result of the Feds piss poor interest rate policy of cutting rates to 1% so no one could afford to save and the banks had to be leveraged 30:1 to make profitable loans.

How did Japan maintain one of the highest saving rates in the world with such low interest rates?

What type of job do you have SD? Have you ever even taken an accounting or corporate finance course? Do you even understand how companies operate?

Clearly the corporate finance people know how to bankrupt a company. How is the company operating anyways.

 

[heyheybooboo]

Originally posted by: Capt Caveman

Originally posted by: RichardE

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Many companies use credit lines for payroll, as they ship out products which are paid in 30-60 days. Banks are pulling credit lines due to the credit crunch.

Correct. Credit Lines to buy product, raw materials, payroll, etc.

The ignorance is strong with some folks here.

LOL

I'll bet all you 'experts' have never actually managed or owned a business, much less operated in an effective manner.

If your business model requires drawing down your credit line to pay for day to day operations on a continuous basis you simply Fail.

You have neither adequate cash flow or working capital.

It's becoming ever so clear to me now why 50% of small businesses fail within the first five years.

 

[Capt Caveman]

Originally posted by: heyheybooboo

Originally posted by: Capt Caveman

Originally posted by: RichardE

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Many companies use credit lines for payroll, as they ship out products which are paid in 30-60 days. Banks are pulling credit lines due to the credit crunch.

Correct. Credit Lines to buy product, raw materials, payroll, etc.

The ignorance is strong with some folks here.

LOL

I'll bet all you 'experts' have never actually managed or owned a business, much less operated in an effective manner.

If your business model requires drawing down your credit line to pay for day to day operations on a continuous basis you simply Fail.

You have neither adequate cash flow or working capital.

It's becoming ever so clear to me now why 50% of small businesses fail within the first five years.

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

 

[dmcowen674]

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

 

[LegendKiller]

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

It isn't illegal nor fraud. I highly doubt you'd ever even talked to a bank VP, they don't speak the stupid.

 

[dmcowen674]

Originally posted by: LegendKiller

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

It isn't illegal nor fraud. I highly doubt you'd ever even talked to a bank VP, they don't speak the stupid.

Sure, that's why he got $20,000 of our money, all of debi's jewelry and the title for my van too. :roll:

Edit: Like I said I am right here less than an hour from you. You can meet me and see the proof for yourself.

 

[heyheybooboo]

Originally posted by: Capt Caveman

Originally posted by: heyheybooboo

Originally posted by: Capt Caveman

Originally posted by: RichardE

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Many companies use credit lines for payroll, as they ship out products which are paid in 30-60 days. Banks are pulling credit lines due to the credit crunch.

Correct. Credit Lines to buy product, raw materials, payroll, etc.

The ignorance is strong with some folks here.

LOL

I'll bet all you 'experts' have never actually managed or owned a business, much less operated in an effective manner.

If your business model requires drawing down your credit line to pay for day to day operations on a continuous basis you simply Fail.

You have neither adequate cash flow or working capital.

It's becoming ever so clear to me now why 50% of small businesses fail within the first five years.

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

Yeah, Right.

So your business model is to continuously raise working capital by selling stock and then use the capital raised from the stock to pay down your debt?

That's one Hell of a business model yah got there :laugh:

 

[Capt Caveman]

Originally posted by: heyheybooboo

Originally posted by: Capt Caveman

Originally posted by: heyheybooboo

Originally posted by: Capt Caveman

Originally posted by: RichardE

Originally posted by: DealMonkey
No kidding. What sort of failure of a company relies on loans to make payroll? WTF?!? Is this the corporate equivalent of the single mom living paycheck-to-paycheck?

Many companies use credit lines for payroll, as they ship out products which are paid in 30-60 days. Banks are pulling credit lines due to the credit crunch.

Correct. Credit Lines to buy product, raw materials, payroll, etc.

The ignorance is strong with some folks here.

LOL

I'll bet all you 'experts' have never actually managed or owned a business, much less operated in an effective manner.

If your business model requires drawing down your credit line to pay for day to day operations on a continuous basis you simply Fail.

You have neither adequate cash flow or working capital.

It's becoming ever so clear to me now why 50% of small businesses fail within the first five years.

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

Yeah, Right.

So your business model is to continuously raise working capital by selling stock and then use the capital raised from the stock to pay down your debt?

That's one Hell of a business model yah got there :laugh:

Do you know how a business runs? Sales cycles? Manufacturing cycles? Why does any company go public? Seriously stop, you have no clue what you're talking about. Again, what do you do for work?

Must have been a good model since Philips purchased us last year.

 

[Capt Caveman]

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

Please explain how it is illegal and fraud? Every company in the world uses credit lines.

 

[dmcowen674]

Originally posted by: Capt Caveman

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

Please explain how it is illegal and fraud? Every company in the world uses credit lines.

For expansion, not payroll

 

[LegendKiller]

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

Please explain how it is illegal and fraud? Every company in the world uses credit lines.

For expansion, not payroll

LOL, thats bullcrap. First off, not every LOC would be the same, every one would have different documentation and structures. To blindly say everything is "illegal" is plain stupid. Second, the use of funds isn't always limited.

The chances of you actually asking this question and telling the truth about it are very remote. You've always been a poor liar.

 

[Capt Caveman]

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

Originally posted by: dmcowen674

Originally posted by: Capt Caveman

You have never run a business then. Have you? What do you do for work? I've brought a company public. We used credit lines to purchase millions of dollars in raw materials to manufacture product, meet payroll, etc.

Too many noobs in this forum.

I had a Bank Vice President say that is illegal and fraud. You should be in jail.

Please explain how it is illegal and fraud? Every company in the world uses credit lines.

For expansion, not payroll

Wrong. And fix your sig, you're an ignorant fool.

 

[daniel49]

Originally posted by: Specop 007
Looks like heres an example of a company that (supposedly) couldnt make payroll due to the tightening credit.

This really sucks. Man I loved those cookies....

Article

Mother's Cookies Goes Out Of Business, Kills Off Circus Animals

If you're a fan of those pink and white frosted Circus Animal cookies from Mother's, either stock up or start priming your nostalgia, because this week the company closed its doors abruptly. They've cited the expected reasons?the rising cost of raw materials, and an inability to borrow in the frozen credit market.

Unfortunately, the private equity firm that owns the company (it's passed through at least four owners in the past 18 years) didn't give employees the federally required 60-day notice, citing "unforeseeable business circumstances." If they couldn't secure money to pay salaries, that may very well be the case.

If you've got $20 in your household goods budget and can't live with the idea of a circus animal-less world, you can make your own with this kid-friendly cookie cutter set. Or just buy some vanilla wafers and pretend you're eating single-celled organisms, you big baby.

crap better run down and buy a bag before there gone

 

[BoberFett]

While there's nothing unique or illegal about using credit to cover the typical cash flow crunch, it seems to me that businesses have been running under the same poor model that consumers have. Running day to day operations on credit is the same as living paycheck to paycheck. All it takes is one economic speedbump and you're out of business.

Individuals are told all the time to have several months worth of salary in savings to weather a rough spot. Corporations would do well to follow the same advice.

 

[sactoking]

If your business model requires drawing down your credit line to pay for day to day operations on a continuous basis you simply Fail.

You have neither adequate cash flow or working capital.

It's becoming ever so clear to me now why 50% of small businesses fail within the first five years.

This.

Notice the use of the word 'continuously'. That is key.

If you consistently need cash flow from investing activities and cash flow from financing activities to offset cash flow for operations, you simply fail. That's accounting 101.

 

[MadRat]

95% of middle class Americans are Fail right now by that standard. So what's your point?

 

[K1052]

Originally posted by: BoberFett
While there's nothing unique or illegal about using credit to cover the typical cash flow crunch, it seems to me that businesses have been running under the same poor model that consumers have. Running day to day operations on credit is the same as living paycheck to paycheck. All it takes is one economic speedbump and you're out of business.

Individuals are told all the time to have several months worth of salary in savings to weather a rough spot. Corporations would do well to follow the same advice.

We already were a ways into the credit slowdown. It has now frozen.

Look for more of this in the next year as companies burn up their cash reserves and go tits up.