Harley payed all back already mid 2009.
....with interest. It wasnt free money, they paid interest on it.
What has been mentioned is correct. When money was made available to prop up the banks, the gov required them to use it for existing loans, not new loans. The problem was FDIC was in a state of bankruptcy, which if the American people had know that, it likley would have resulted in a run on banks similar to the great depression.
When the loan money dried up, companies that routinely relied on short term loans were faced with no capital and going out of business. Money for loans was then made available to these companies.
Its a fact that most companies rely on short term loans to float their operations. Example would be, taking out a loan for $1M for buying parts, producing a product, and then selling that product to recoup the $1M in parts plus any assocaited costs. That doesnt happen instantaneoulsy, it can take months to sell enough product to make up that $1M they borrowed. But, once they earn enough on products sold to repay the $1M loan, plus interest, its payed back. This is a very simple example of how businesses operate.
Unfortunately, money was not made aviailable to many smal companies, and they either weathered the storm or closed shop. And, many did close shop.
MoCo finance borrows short term money on a nearly daily basis. So, you can see how capital loans drying up would affect their loan business in short order. They had to take the gov loans, or go under. That would not have been a good thing for them.
If you choose not to buy a HD based on their taking loans, thats up to you, but base it on the facts and not perception or emotion. The Gov stopped allowing banks to loan money while FDIC was propped up, so what would you expect MoCo, and other companies, to do?
Dennis
Author
Topic: What do you think about the American taxpayers bailing out Harley Davidson? (Read 3967 times)