Consumers Look to Short Term Loans as Chrysler Tries to Swap Debt

Funding options decreasing

Short term loans are becoming a quick answer to consumers in need. With the banking crisis still in full swing, people are in need of bill payment options that are outside of the norm. It used to be that when people needed funding, they went to the bank. That is not the case anymore because more and more banks are tightening up funding and even high-credit applicants are having a difficult time finding und erwriters.

Another problem with the economy comes from auto companies. The auto giants are suffering and governmental bailouts helped, but did not stop their problems. Although they are still trying to find a way to recover, auto companies are under heavy pressure and strict deadlines. Their struggle is contributing a lot to the faltering economy.

Chrysler trying to swap debt

Chrysler had a government imposed deadline to restructure by April 30th. Banks and hedge funds are proposing forgiving Chrysler of $2.5 billion in debt for a 40% share of the Chrysler-Fiat company. The government is expecting the car company to restructure using a debt swap, cutting labor costs or negotiating some alliance with Fiat Group. Should they be unable to do so by the deadline, they almost positively face total liquidation.

Right now Chrysler is managing by relying on $4 billion in loans and is hoping to receive an additional $500 million in funding. They are set to receive the additional monies, but only if they are able to meet strict deadlines and requirements of restructure as set forth by the government. A series of offers and counter-offers have brought Chrysler to the state it is now: under pressure to get the restructure done. They risk losing the money that was apportioned for their salvation. ... click here to read the rest of the article titled "Consumers Look to Short Term Loans as Chrysler Tries to Swap Debt"