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Obama hijacked the Gibbs press briefing today - and said the most astounding things, one of which is below.
Quote:
Let me put it this way. Most small businesses right now, if they've got enough customers to make a profit and they can get the bank loans required to boost their payroll, boost their inventory and sell to those customers, they will do so.
This absolute cements in my mind that obama and his team (who collectively have NO business experience), are completely clueless when it comes to why/how/when a business expands their payrolls.
Does he really believe a well run business will borrow money to "boost their payrolls"?
And they also won't borrow to boost their inventory UNLESS demand is there.
Demand AND profits will boost the payroll.
I am stunned at the level of ignorance from this guy.
Obama is taking a page from his playbook. Borrow money then spend like drunken sailors while racking up massive amounts of debt. I guess he assumes that's how the business world operates. I wonder how many businesses would succeed if they continued down this path of borrowing to make payroll?
(psst, businesses borrow money to build and expand their business, not to boost payrolls)
New businesses use loans to meet payroll while they build their book of business.
Well, it used to happen all the time, I think that was the Presidents point, small business needs to be able to get back to that, and the Govt can help that process.
Obama hijacked the Gibbs press briefing today - and said the most astounding things, one of which is below.
This absolute cements in my mind that obama and his team (who collectively have NO business experience), are completely clueless when it comes to why/how/when a business expands their payrolls.
Does he really believe a well run business will borrow money to "boost their payrolls"?
And they also won't borrow to boost their inventory UNLESS demand is there.
Demand AND profits will boost the payroll.
I am stunned at the level of ignorance from this guy.
I'm stunned at the ignorance of this post. Easy credit is a way for business's to expand. That's all he's saying.
Nobody without a chip on their shoulder would disagree. You hate him. Whatever he says is wrong. Period.
It actually is not only pretty standard operations for many businesses, and required to be done for some. Most retailers for instance operate in the red till around Thanksgiving (hence Black Friday).
Most businesses use lines of credit to meet obligations when cash flow is slow (and receivables are high), there is seasonality to the business, or there have been things that drained cash. At least half of those I have been a part of used lines of credit for 6 months out of the year to help with short term obligations.
The other option is to just lay people off during those times. This slows down business and increases the unemployment as they don't have enough labor to take advantage of selling more units when cash comes later. It also limits expansion, as they need to wait for cash to hire new people to make more instead of hiring more people to produce more as sales increase while the cash is still in receivables.
New businesses use loans to meet payroll while they build their book of business.
Actually most businesses obtain a line of credit from their vendors, not the banks in order to boost inventory to THEN meet payroll.
While some businesses do indeed use loans to meet payroll, they are usually not small businesses, they are larger established businesses who extend credit themself to customers, thereby allowing themself to use accounts receivables to borrow against.
Actually most businesses obtain a line of credit from their vendors, not the banks in order to boost inventory to THEN meet payroll.
Sometimes yes and somtimes no.
Quote:
While some businesses do indeed use loans to meet payroll, they are usually not small businesses, they are larger established businesses who extend credit themself to customers, thereby allowing themself to use accounts receivables to borrow against.
I'm going to have to ahead and disagree with you on this one. Small businesses obtain loans to meet payroll all the time. Collateral for those loans is another deal. The loans can be secured (house as collateral) or unsecured (solid credit history).
In fact, there's cottage industry for such loans. A simple google search will show you that.
Location: By the sea, by the sea, by the beautiful sea
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Quote:
Originally Posted by sanrene
Most small businesses right now, if they've got enough customers to make a profit and they can get the bank loans required to boost their payroll, boost their inventory and sell to those customers, they will do so.
And just WHERE are the great flaws you allege in that statement?
I don't believe the ignorance of how business gets done is in the White House here
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