Agreed. The items listed are not objections but rather considerations when
investigating a foreign funding source. After the number crunching, the
foreign bank may turn out to be the best option.
The joint-venture option is intriguing, especially if it is cash-rich and
looking for an high return investment opportuinity itself (instead of
Japanese bank deposits). You may find a willing capital partner rather than
just a way to secure a bank line of credit.
Tuesday, January 5, 1999
Re:A Half-Baked Idea
Monday, January 4, 1999
Re: A Half-Baked Idea
1. cost of buying into a joint venture is formidable
2. must consider exchange rate fluctuations that can negate any advantage
3. overhead required to deal with foreign banks, currency, etc. could be
more than savings presented by lower interest rate
4. depending on size of venture, preferred low rate may not be available to
small biz
5. bank may require deposits to be made locally, #2 #3 then repeated
6. other
These are good objections, but item #1 is an assertion, yet to be argued.
Starting a small business can be formidible in cost...or rather inexpensive
depending on how you proceed. 2,3 and 4 would be important considerations,
but part 5...the underemployed or overstaffed banks in these extreme times may
be interested in looking at very small and safe deals...
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