[joeltrout]

$this->bbcode_second_pass_quote('hironegro', '
')Why don't you explain it to him ass-hole.

[MrBill]

Some large scale projects have very long time horizons. It might be years before beginning such a project starting at the drawing board until they finally sell anything to start paying down their accumulated debts nevermind making a return on their investment. So they need bridge loans to pay all the costs up until such time. Think power plants.

Some manufacturing also takes a long time between conception and completion. Think Boeing or Airbus. They cannot run their expenses out of pocket. At least not until they start selling planes on a regular basis. But even then they will have peaks and troughs in customer demand. At times like now they may even have customers cancelling existing orders.

If a project has a useful economic life of, say, 20 or 30 years then it makes financial sense to match the repayment of debt to the economic life of the facility. It might not make too much sense to pay for power plant upfront when it will be generating revenue for many years. So there are a lot of productive uses for credit. It is not all just about consumer consumption.

As madpaddler said, working capital is as important to a business as machines and labor.

[Buggy]

$this->bbcode_second_pass_quote('MrBill', 'S')ome large scale projects have very long time horizons. It might be years before beginning such a project starting at the drawing board until they finally sell anything to start paying down their accumulated debts nevermind making a return on their investment. So they need bridge loans to pay all the costs up until such time. Think power plants.

Some manufacturing also takes a long time between conception and completion. Think Boeing or Airbus. They cannot run their expenses out of pocket. At least not until they start selling planes on a regular basis. But even then they will have peaks and troughs in customer demand. At times like now they may even have customers cancelling existing orders.

If a project has a useful economic life of, say, 20 or 30 years then it makes financial sense to match the repayment of debt to the economic life of the facility. It might not make too much sense to pay for power plant upfront when it will be generating revenue for many years. So there are a lot of productive uses for credit. It is not all just about consumer consumption.

As madpaddler said, working capital is as important to a business as machines and labor.

[joeltrout]

$this->bbcode_second_pass_quote('MrBill', 'S')ome large scale projects have very long time horizons. It might be years before beginning such a project starting at the drawing board until they finally sell anything to start paying down their accumulated debts nevermind making a return on their investment. So they need bridge loans to pay all the costs up until such time. Think power plants.

[Buggy]

$this->bbcode_second_pass_quote('joeltrout', '')$this->bbcode_second_pass_quote('MrBill', 'S')ome large scale projects have very long time horizons. It might be years before beginning such a project starting at the drawing board until they finally sell anything to start paying down their accumulated debts nevermind making a return on their investment. So they need bridge loans to pay all the costs up until such time. Think power plants.

[joeltrout]

$this->bbcode_second_pass_quote('Buggy', '
')What!??!?!?! You mean gas prices aren't going to drop this week because congres let the ban on off shore drilling expire!?!?! I'm flabergasted. I guess I won't buy that Hummer on credit afterall.