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Turned Down By Big Banks, Small Firms Turn To Purchase Order Financing

13 pointsby jsm386over 15 years ago

1 comment

iamelgringoover 15 years ago
Okay, two things:<p><i>But his money doesn’t come cheap. It’s typically 3.5 percent for the first 30 days, and 1.25 percent for every 10 days after that, an annualized percentage north of 40 percent. Most loans, he says, are repaid within 60 days.</i><p>Holy Crap! 40% annualized percentage rate. That's extortion.<p>But,<p><i>Last year, Hartsko lent roughly $150 million, compared with $84 million in 2008 and $60 million the year before that, he said. He estimates that the company will lend about $240 million this year. Profit, he says, was in the “high six figures” in 2009.</i><p>He's making a high six figure profit ( or &#60; $1 million ) on $150 million of lending, but charging an annual percentage of %40 on what he's lent, something doesn't add up.
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