[clairity]

taking equity seems to pop up with every story on corporate bailouts.

the problem with taking equity is that it's not simply an income stream, it's a responsibility. you become a stakeholder and need to manage the asset lest it devalue in ways you don't like. it's messy and much more criticizable, something politicians and bureaucrats loathe.

fixed-income assets like loans are much simpler, and have the added benefit of naturally having higher liquidation preference (bondholders get paid before shareholders).

loans with performance penalties/incentives are cleaner to implement, but the problem there is lobbying that waters down penalties and magnifies incentives.

there's no simple solution, including taking equity. i'd love every loan to have a clause stipulating no executive stock incentives or share buy-backs for 7 years post-loan, but no one is lobbying for that.

[kijin]

Loan means the company will be required to pay it back at some point. Suddenly increasing a company's liabilities by millions or billions, not to mention the interest burden, might have major significance for the long-term survivability of said company. That's fine if you only care about easing the short-term shock of the lockdown, but it could very well slow down the post-lockdown recovery.

[asdff]

These loans can be forgiven if stipulations are followed.