this post was submitted on 29 Sep 2025
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you don't understand why allowing someone to take on debt to purchase a business is legal?
They should only be able to use their own capital for the loan, not the company they are buying putting up the majority of the capital. That's the problem with leveraged buyouts: you're effectively putting the company up for liquidation when that happens, because the buyer is likely going to gut and shutter the company so they end up with a profit in the end.
Ask Toys R Us about the process.
i take it you've never dealt with the sale of a small business
You just described a situation that is not happening here. If you want to take on debt to buy a business, that might be reasonble. You, the person, BeeegScaaawyCripple, would assume the debt.
Of course PE doesn't work that way. The borrowers themselves are at no financial risk. That's the point, that's the scam.
that's due to exploiting specific business structures. literally anyone can do that (e.g. five associates formed an LLC to buy the building they work in. the loans in question went to the LLC, not the partners), so i'm not sure why you're saying it's not what's happening.
~~I just feels weird that you can use the value of the company you buy to buy said company. It just "feels" weird that you can get a loan and use whatever you buy as leverage.~~
Now that I am typing that out that is not really different from getting a loan to buy a house. Never mind, I guess it just seems weird when it is such an insane sum of money ¯\(ツ)/¯
or like a dentist finishing dental school and buying someone's practice. you get a huge fucking loan because who still has money after dental school