PVR Wire

1. you don't secure additional financing unless you're pretty positive you will need it.

Posted at 7:51PM on Jan 27th 2007 by Jason

2. Jason, that's not true in the corporate world. Corporations secure lines of credit all the time, it is standard practice. It adds stability as it is a safety net in case of unforeseen expenses, a downturn, etc. And the best time to secure the line of credit is when you *don't* foresee an immediate need, because you get better terms. If you're already in a position where it is obvious you need the money, then the lending institutions impose harsher terms because it is more risk to them.

Posted at 11:04PM on Jan 27th 2007 by MegaZone

3. MegaZone is absolutely correct. Borrowing money whilst in trouble means that any lender would charge you far higher rates of interest and ask for far more security that for a relatively healthy company. Plus the faster you can fix a problem arises, the better so having the cash ready cuts down on the response time and thus the company has.may have a better chance of coming out in a better state than a slower company/organization.

Posted at 10:10AM on Jan 28th 2007 by Beeswax

4. And borrowing money "befor you need it" at more favorable rates can also help pump up investor confidence ..

Posted at 7:06PM on Jan 28th 2007 by Peoples