Let me tell you about lines of credit. Most businesses have them.

Raven

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Wed Jul-27-11 03:23 PM
Original message

Let me tell you about lines of credit. Most businesses have them.

When my partners and I began our law firm in the early '90s we obtained a Line of Credit from State Street Bank in Boston. The Line is meant to be a cash flow cushion. If we drew on the Line, we would have to show the Bank that we had bills out and that the "payables" were good. The Line of Credit is essential for many businesses, not just law firms. The Line's interest rate is not fixed, it's pegged to the market. So...the Republicans, in addition to ruining seniors and working folks, will kill many of the small and medium businesses that they profess to champion.

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FSogol

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Wed Jul-27-11 03:27 PM
Response to Original message

1. The GOP default will stop all growth and creation of small and mid-sized businesses. n/t

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Raven

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Wed Jul-27-11 03:31 PM
Response to Reply #1

3. It really will. That's why Boehner's comments the other night about

his business acumen made me vomit. And the other scary thing about this is that the Bank could "call" the Line at any time so no matter how many receivables or payables you have out there, you could be in default in the blink of an eye. I am sure that some small and medium businesspeople are waking up to this about now.

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FSogol

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Wed Jul-27-11 03:33 PM
Response to Reply #3

4. Unemployment will skyrocket. Small and mid size businesses will be unable to hire and

unwilling to replace workers who leave/retire/die/etc.

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Raven

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Wed Jul-27-11 03:40 PM
Response to Reply #4

5. Right. Listen, there were times when I had as much as $500K in

receivables, just myself, and payment usually came at a closing of a development deal.We often pulled from the line to cover expenses until the closing. If that line had been called we would not have been able to make payroll or pay the rent. It would have been over and me and my partners would have been personally liable. This is truly and real and nasty crisis.

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FSogol

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Wed Jul-27-11 03:47 PM
Response to Reply #5

6. My company also. Not having the bank credit line could be disastrous. n/t

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pinto

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Wed Jul-27-11 03:30 PM
Response to Original message

2. Thanks for the clear, concise example.

:kick:

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