Re: News - Golden Hope listed on new U.S. stock market exchange
in response to
by
posted on
Dec 09, 2010 12:48PM
New Discovery Resulting in a 20KM Mineralized Gold Belt
EB, you wrote;
As for a bank loan, are you saying that banks don't entertain loans for risky companies? In fact, they do. And, given the gold mania at present, it's not totally out of the question that excellent assay results would lead a bank to entertain a high interest rate loan to this company.
Banks do provide credit to risky companies. The problem here is that since at the moment GNH's revenues are 0, with a negative cash flow, the risk is enormous for a bank to accept. To oversimply, in general a bank will compare your revenues vs debt, called a debt service ratio. This ratio has to be roughly 40%, meaning in order to obtain a $1 million loan GNH's revenue would have to be roughly $2.4 million.