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by PopAlongKid 1114 days ago
>Lending money to a business is essentially the same as investing in it anyway. If the business defaults the result is the same.

It is far more common for a business when times are hard to stop (or never start) paying out to its equity investors (dividends) while still servicing its debt. It is not "essentially the same as investing".
1 comments
willmadden 1114 days ago
That’s only because of the way loan agreements are structured and because law and regulation are written around a debt based system.

If businesses couldn’t take on debt there would only be one class of stakeholders, the shareholders.

It would be an interesting thing to pilot in Muslim countries where charging interest is effectively forbidden. I think it could be a more efficient, transparent, and equitable financial system.

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