Back-To-Back Letters Of Credit
Drastic times call for drastic measures. You saw an ad selling two DeLoreans on Craigslist that you know your friend's high-end car rental company, Viva los DeLoreans, located in Chile, would buy in an instant. What should you do?
Be the middleman. Broker the deal.
You arrange a loan here in the U.S. to buy these two DeLoreans with the seller getting the dough. Your friend in Chile goes to his bank and gets a loan to buy the two cars from you. That process is obtaining back-to-back letters of credit with the intent of easing the level of risk for any one party. And if done right, you, the middleman, get a bit of dinero in the deal to make it worthwhile.
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Finance: What is a Credit Limit?39 Views
Finance, a la shmoop. What is a credit limit? Alright people well simply put the
maximum amount you get to charge or use on a loan or credit account, that's a [Credit limit definition written on a 100 dollar bill]
credit limit. So yeah it's that thing that keeps toddler Joey from ordering
two hundred thousand dollars worth of Snickers bars. [Toddler looking at the snickers bar]
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dollar line of credit or credit card you can't spend $20,000 on a trip to Vegas,
sorry. You might be able to go on a smaller trip to Atlantic City but once [Picture of Atlantic City]
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back, and by the way taking that smaller trip and then putting everything on red [Chips landing on a roulette table]
22 in hopes of funding your next trip to Vegas? Probably not the soundest
financial planning... sorry, let's keep it real. [Guy putting on a serious face]
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