In a federal regulatory filing Harley-Davidson Inc. has amended a debt agreement, extending the term on a $500 Million loan until March 17, 2010. Harley received the loan last Dec. 12 from a group of lenders that included JPMorgan Chase. The loan originally was set to expire on March 31, at which time Harley would have had to repay the balance in full.
On the surface this seems a lot like one of those “pay-day” loans. High cost loans that must be repaid on a short term basis to keep checks from bouncing usually don’t solve a financial crisis. Quoting from the payday loan consumer site:
“Consumers who run short of money before payday probably cannot manage to borrow from a payday loan store. High cost loans that must be repaid on the next payday to keep the check from bouncing usually don’t solve a financial crisis — they only make financial worries worse. Coping with pressing financial problems without adding more debt takes effort and may require creativity but can save you a lot of money, worry, and stress.”
The new agreement doesn’t result in an off-balance sheet arrangement for the motorcycle manufacturer and it will be treated as financing on the company’s consolidated financial statements. Maybe it’s time for a quick click to the Center for Responsible Lending web site?
Photo courtesy of Mint.
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