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Suggestion: Scaling loan rates
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Jim Frazer RJ: Kenneth Noisewater CO: Kenneth Noisewater Post Rating: 0 + / - Total Posts: 25 Karma: 31 Joined: Apr 14, 2012 |
Posted on Jun 24, 2012 At the moment there is no reason to pay back your loans. 1% interest is a pitance compared to what your able to earn by investing that money in product or expansion. If anything, the current system encourages you to spend all your capital at 11:58 and allow your maintenance/salary/tax expenses to be paid as a "loan". I propose that loan rates scale based on company level. Something along the lines of 1% + (CL - 4). It's still a gradual enough increase that it should keep fresh companies at 1% until they are well established and able to pay a loan back without destroying their companies. And it disourages racking up massive debt that you have no intention of paying back. |
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Bob Malone RJ: Bob Malone CO: Malone Post Rating: 0 + / - Total Posts: 341 Karma: 191 Joined: Apr 17, 2012 |
Posted on Jun 24, 2012 I would rather like to see private banks replacing Econosia bank, would be far more interesting. And would at the end for sure increase loan rates :)
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Andrew Naples RJ: Clemen Salad CO: Clemen Post Rating: 0 + / - Total Posts: 214 Karma: 89 Joined: Apr 26, 2012 |
Posted on Jun 24, 2012 That would be pretty cool. ^^^
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Richard Ripberger RJ: Rip CO: Rip Post Rating: 0 + / - Total Posts: 153 Karma: 78 Joined: Mar 28, 2012 |
Posted on Jun 24, 2012 The credit rating would need to factor in net worth to debt ration. Lose a rating for every 10% above 20% of net worth or something like that. Also there should be a hard limit of something like 60-70% of net worth so that even auto loan won't give you more. It should export goods or sell factory space to pay bills or as a last resort force liquidation of the company. Which would eventually cleanup abandoned companies.
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Victoria Raverna RJ: Victoria Raverna CO: Victoria Raverna Post Rating: 0 + / - Total Posts: 107 Karma: 43 Joined: Apr 11, 2012 |
Posted on Jun 24, 2012 Or implement debt as several separate loans with each have their own interest rate and payment term.For example: For company with good credit rating can borrow up to certain percentage of their NW from selling bonds with 1% interest rate per day for 10 years game time and at the end of the term, it has to be paid Failure to do that result in credit rating downgrade. There are no daily interest payment, you pay back the whole loan + interest at the end of term. If you need more loan than your NW allowed at the 1% interest rate, you can take one with 2% interest. For company with lesser credit rating, the same deal but with 2% interest rate then continue to increase based as the credit rating go lower. For those that run out of money to pay the upkeep, tax, and salaries. They get overdraft loan with 20% interest rate with no deadline to pay all back but with daily interest payment, it is better to take out a loan at normal rate to pay that back if you can. If you fail to pay the overdraft loan after it reach over 80% NW, you're forced to sell the company to pay back loan. Each time you need the overdraft loan, you credit rating drop 1 level. |
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Bob Malone RJ: Bob Malone CO: Malone Post Rating: 0 + / - Total Posts: 341 Karma: 191 Joined: Apr 17, 2012 |
Posted on Jun 25, 2012 whatever the change, if any, please announce it in advance so we can adapt our strategy...My debt is around 40 % my networth, so if rates are increasing it will hurt me a lot. I would be glad to have few days to decrease my debt before the rate increase... |
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Bob Malone RJ: Bob Malone CO: Malone Post Rating: 0 + / - Total Posts: 341 Karma: 191 Joined: Apr 17, 2012 |
Posted on Jun 27, 2012 Tha's not wrong eheh, that's why I stopped to increase my debt ( so debt/NW ratio is decreasing every day ).
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Edwin Quintanilla RJ: EdqMaster CO: Edqmaster Post Rating: 0 + / - Total Posts: 74 Karma: 9 Joined: May 3, 2012 |
Posted on Jul 3, 2012 I think we should have to two types of loans longterm(initial loan) which is structred and your are forced to pay back within a certain time frame.Also longterm debt should be able to be reissued base on company level. The other should be short term debt with a 5% interest that covers daily upkeep and is scalable based on company level. Its kinda the same thing Victoria Raverna is talking about just without the credit rating thing.
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