2007-10-19 17:34:28 · 2 answers · asked by Nikkikaneshiro 1 in Social Science ➔ Economics
probably because they worry the company may not be able to repay the loan.
I heard the story once of the man who started Bricklin Motors years ago who was given a loan of a million dollars to start up that company on the strength of the plans he had for a new car. He hadn't borrowed enough to get started though and went back for a second million and was given that as well, Finding that he still didn't have enough he went back a third time but could not borrow any more money so the company went bankrupt and there is not Bricklins being made. this may be an illustration of why the bank will not extend further debt.
as a footnote to the story though was the statement by the person relating the story, that if Bricklin had asked for five million to begin with, the car was so good that he would have been given the loan, the company would have survived and you would see Bricklin automobiles on the road today , and he could have used what he didn't need to pay on the loan.
2007-10-19 17:53:59 · answer #1 · answered by Al B 7 · 0⤊ 0⤋
Maybe the company has already used up its credit line and there are many open balance or loans... does this makes sense!
2007-10-23 17:03:20 · answer #2 · answered by foxy123magenta 3 · 0⤊ 0⤋