Can A Company Lose Money When It Charges A 50% Interest Rate? |
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October 24, 2014 |
October 2014 Bond Updates
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The answer is yes. I was recently writing an article on merchant cash advances and stumbled across a surprising piece of information. A company which loans money to small businesses at an interest rate of more than 50% was losing money. A number of companies have entered the alternative lending space. Banks have been decreasing their lending to small business for several decades providing an opportunity for new players to fill a vital need for capital.
This article will deal with the question of how a company charging interest rates that are far beyond the maximum interest rates on consumer credit cards can lose money.
What could potentially cause a company to lose money on these loans?
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View more at: http://www.forbes.com/sites/marcprosser/2014/10/21/can-you-lose-money-with-a-50-interest-rate/
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