Sandy

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melveyr
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Re: Sandy

Post by melveyr »

Reub wrote: FEMA recommended that I apply for a small business loan (even though I don't have a small business). Now the SBA is offering me funds at 3.35% for 17 years to help fix the house. Do you think that I should accept this or dip into my savings (I'm newly retired).
That's a tough question. That looks like a pretty low rate, but at the same time issuing personal long-term debt while holding the PP is somewhat of a contradiction because the PP buys LT debt (and at a lower rate than 3.35%). As painful as it sounds I would probably stay conservative and sell off PP assets instead of taking the loan.

Or take the entirely opposite direction and just go long gold, stocks, and cash (knowing that this is much riskier) and taking the loan. Either way, I am not sure issuing personal LT debt while simultaneously buying LT gov debt makes sense....

How exactly is the loan structured? Is it kind of like a mortgage where it is essentially callable (allowing you to refinance if rates drop)? That changes the dynamic so the debt would not be a perfect negative mirror image of your LTT.
Last edited by melveyr on Wed Dec 05, 2012 1:13 pm, edited 1 time in total.
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