Barca asked for a line of credit

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Re: Barca asked for a line of credit

Post by BarrileteCosmico on Wed Jul 18, 2018 10:15 pm

LOCs are not actual loans, they're just there if you need them, you only pay interest if you actually draw from it. They're there to ensure liquidity. I don't see what the big deal is, all I see here is the circlejerk that debt = bad when we all know that's not true.

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Re: Barca asked for a line of credit

Post by Mr Nick09 on Wed Jul 18, 2018 10:31 pm

Maybe it's just me, but for a club as big as barca which just announced >900 millions in revenues for 2017-18, taking a LOC in the middle of the year to cover the payroll doesnt exactly show great management. this is payroll we are talking about, something which should be planned and budgeted. this is an a loan to finance an expensive transfer lol.

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Re: Barca asked for a line of credit

Post by BarrileteCosmico on Wed Jul 18, 2018 10:33 pm

Well, you're wrong. This is them planning it. Loans are obtained all the time to guarantee liquidity. Small business, large corporations, countries, etc, they all do it. It's just how the world works and there is nothing wrong with it as long as they can pay for it (and judging by the climbing revenues, they probably can).

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Re: Barca asked for a line of credit

Post by Mr Nick09 on Wed Jul 18, 2018 10:41 pm

There is nothing wrong in having a line of credit, again, it's what you take it out for. Companies draw from such loan to usually finance big investment which will then allow them to repay it. But drawing on a LOC just to cover your payroll? Come on now, that should have been budgeted in their projections. If you have to draw on a LOC to cover your payroll when your club has not undergone some type of large business expenditure which draws on the cash available then something is not being done right

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