A short-term loan comes in handy for many individuals for unexpected expenditures like car repair, a crown at the dentist or a traffic ticket. But when you are the culprit in the 2010 oil spill in the Gulf of Mexico, a short-term loan will always in handy. Oil giant BP is talking with banks to raise about $ 5 billion in short-term loans to help finance liabilities arising from the oil spill within the Gulf of Mexico, the Financial Times newspaper reported Thursday. By the end of last week BP had raised $ 20 billion in cash and credit to tackle costs from the spill, as outlined by the report.
Post resource: BP looks for short-term loan to cover costs in oil spill cleanup by Personal Money Store
Short-term loans are easy — unless you are BP
For most individuals, getting a short term loan is easy. With just a little online research some pretty reasonable rates could be found, but if you run an oil company with a criminally negligent sales record that’s trying to buy its way out of an epic economic and environmental disaster it is a little tougher. As outlined by Investment Week, in seeking its $ 5 billion in short-term loans, BP is having to pay more than commonly charged by banks in margins and fees, people close to the transactions said. The banks are holding the cards in this deal. Soon, BP is bound to be desperate for cash. As the undersea gusher continues unabated, banks appear to be much more concerned over the potential size of BP’s liabilities — so they are going to hold the oil business over a barrel.
BP looks for instant money
A unsecured personal loans or a pay day provides the cash now most individuals have to stop things like missing a credit card payment, preventing a bank overdraft fee, or simply getting the car out of the shop to get to work. BP has bigger troubles on its hands. To solve it, Reuters reports that BP is looking at various debt-financing options, which consist of extending bank credit lines as much as $ 7 billion. Earlier this year, the oil spill business looked like they were considering a corporate bond offering and additional asset sales. But those ideas are on hold for now. Even though it is angling for short-term loans, BP has said it has enough cash resources to meet oil spill cleanup costs without having to make use of these possibilities.
More than just one secured loans is needed by BP
A unsecured loans or payday loans no fax for instant cash loans solves their financial dilemma and they move on. BP's costs will get bigger. It was reported by the Street reports BP said this week the costs of cleaning up the oil spill in the Gulf of Mexico had reached $ 2.65 billion. This figure, which will continue to grow, is already more than $ 300 million more than it was estimated to be. On June 16, BP agreed with the Obama administration to create a $ 20 billion fund to compensate for the economic damage being wrought by the oil spill.
BP needs to learn to manage debt
It’s not known whether $ 20 billion could be enough. As outlined by the Associated Press, on July 1 BP’s oil spill became the largest-ever within the Gulf of Mexico. Its damaged oil well has been pumping out oil for about two and a half months now, surpassed the formerly record-setting 140 million gallons spilled by the Ixtoc I spill near Mexico’s coast from 1979 to 1980. It is is highly unlikely that BP’s short term loan strategy could be adequate to deal with the long-term debt that lies ahead for the Gulf of Mexico.
Discover more information:
Investment week
investmentweek.co.uk/investment-week/news/1720119/bp-raise-funds-papers
Reuters
reuters.com/article/idUSTRE65G44C20100617?type=ousivMolt
The Street
thestreet.com/story/10796965/1/bp-in-short-term-finance-talks.html?cm_ven=GOOGLEFI
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