Corporate finance and personal finance aren’t as diverse as you would think. The businesses which need some guaranteed loans at a while, or at least a line of credit in case they need a short term installment loan are some of the biggest names out there. Even the Ford Motor Company got guaranteed loans at some point. Ford is in debt relief mode. Meanwhile, Freddie Mac and Fannie Mae need more guaranteed loans to stay afloat.
Lord Mr. Ford you got guaranteed loans
During the worst of the recession, the Ford Motor Co. borrowed $ 23.5 billion to stay afloat and keep Ford from having to file bankruptcy and ask for bailout money. Ford only asked for emergency lines of credit if necessary, and didn’t need a bailout. It turned out not asking for emergency money from the government at that moment panned out. As Chrysler and GM tried to figure things out, according to the Wall Street Journal, Ford saw a 22 percent jump in sales. Sometimes just knowing you can borrow can give a boost of confidence; some people like knowing they can get a pay day loan if they really need it.
More guaranteed loans for Freddie and Fannie
Freddie Mac and Fannie Mae need more in taxpayer funded guaranteed loans. According to ABC, Freddie has lost about $ 6 billion for the second quarter of this year alone. The cash hemorrhaging firm is asking for $ 1.8 billion from taxpayers. The twin mortgage giants are struggling, and both have less than two years to get their affairs in order. At that point, Treasury Secretary Geithner won’t write any more checks.
Fortune 500 corporations have credit scores too
Ford will improve the company’s credit score and get better deals on financing the more of their debt they pay off. It’s like an individual paying down their credit card to improve their credit rating; it works for the biggest corporations too.
Additional reading
online.wsj.com/article/SB20001424052748703589404575417491742322262.html
abcnews.go.com/Business/wireStory?id=11356950
