HUMOR: Secured Credit ( Cards ) for Business and Govt?!!
When I first started talking about secured credit cards a few years back, I thought the concept was a little odd. Having to put a security deposit down for a credit card seemed ridiculous.
The Credit Crunch
Corporations using secured credit?
Wouldn't it be funny if corporations with bad credit were treated like consumers with bad credit?
Need a secured credit card?
It would be difficult for a corporation that needed $1 million in credit to have to give a security deposit of $1 million cash down. It would kind of defeat the purpose. Businesses would shut down left and right.
Banks get their clients to put up other assets in the form of buildings, machinery, goodwill, patents etc... instead of cash. The consumer doesn't have these types of luxuries though.
I think that the companies with the worst credit should have to put up cash to secure their loans. They should get the same treatment as the consumer...
Otherwise, If companies can use their buildings and assets to get loans, I think that consumers should be able to put up their personal possessions as collateral.. (tongue in cheek)
- Things consumers could use for credit collateral.
- Sleeping bags...
- Paintings
- The lawn mower
- Canned goods
- Old computers
- Recipe books and other books.
- Old couches and chairs.
Oh yeah... then consumers should be able to give these items whatever value they want... They should be able to tell the banks that their recipe books are worth at least $5000, and their canned goods are priceless, however they would value them at $2500. This is what the corporations do at the top level isn't it?
Can you take my movies and a jar of rice as credit collateral?
I would like to give my Star Wars trilogy and a jar of rice.. I think they should be worth $1,639.00 based on my internal valuations. This should be good enough to get a credit card or other loan.
THE POINT:
I can't see corporations having to give 100% cash security deposits to back all of their credit. This would immediately shut down business.. However it may be a good idea as it would make corporations run a bit more responsibly.
The whole economy problem is blamed on subprime mortgages and the credit crunch. They're blaming the consumer for taking out too many subprime mortgages.
I get a sense that there is alot of subprime corporate debt as well.. Think back to the time of junk bonds etc. These days, corporations are leveraged to the hilt. They're maxed out on credit as much as the consumer.
IN CONCLUSION:
corporations need "secured credit cards " to help their credit problems just as much as consumers do!!
