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/biz/ - Business & Finance

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52666220 No.52666220 [Reply] [Original]

Like can they just stop taking out loans? I live within my means and save up surplus income as cash to build wealth. Why can't businesses do that? Why is it ALWAYS that they had taken out loans and then suddenly default and fall apart? Why do they do this?

>> No.52666234

>>52666220
A corporation is by definition a vehicle which allows personal profit at no personal risk. So they are more likely to take bigger gambles than you are.

>> No.52666299
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52666299

>>52666220
In Germany it was fairly common to save during good years to keep everyone working during bad years. You saw a lot of oldschool businesses staying afloat during the economic crisis of 2008.

Due monetary policy lending became so cheap that most companies start lending more and more. In best case for doing new big investments but mostly to pay them self a lot and keep the business going (bankers strongly adviced ofcourse taking on debts). Besides this you saw a lot of businesses being bought with debt by private equity and because of the acquisition with debt they fire most of the people and cut down on costs.

To make a long story short, rational behaviour is not rewarded in our current society because of greed and big finance.

>> No.52667073

>>52666220

>you sell cakes
>your neighbor also sells cakes
>your neighbor takes out a loan and opens a second shop
>your sales drop
>you take out a loan and open another shop
>your sales increase
>all of a sudden no one wants cake anymore