<blockquote>
<p>does this negatively affect their power to create added value for the future?</p>
</blockquote>
<p>You seem to answer your own question (&quot;<em>bank loan aids given disproportionately to the firm's assets <strong>will definitely reduce</strong> its power to generate added value</em>&quot;, emphasis added), but the conclusion does not follow from the premise. Basically you have a preconceived idea and expect/request others to provide support for it.</p>
<p>If anything, facilitating bank loans will encourage the <em>genuine</em> enterprises to pursue added value, in part because leverage is greater.</p>
<p>It can also lure fraudulent debtors, but that is outside the scope of your question because talking about &quot;<em>power</em> to generate added value&quot; is pointless where a debtor does not even have the <em>intention</em> to generate added value.</p>
<p>Facilitating bank loans tends to deprive other genuine/deserving applicants of getting a loan. The genuine entrepeneur's advantageous condition is likely to result in him achieving a greater <em>market share</em>. Except for scenarios where an inefficient monopoly ensues, that advantage would translate to increasing that entrepeneur's power to generate added value.</p>

CC BY-SA 4.0
2021-06-26T10:24:55.157Z
Actually I don't wanna seem to answer my own question. I have just some prejudice that makes me think that way. Thank you for your explanatory comment which supports my thoughts. Would you suggest me an academic paper that scrutinizing this subject ? Regards.
Samet Sökel
CC BY-SA 4.0
2021-06-25T22:04:11.000Z
2021-06-25T22:04:11.000Z
Iñaki Viggers
<p>I'm new to the economics exchange environment. My question may seem amateurish, but I did not find a satisfactory result by doing the necessary literature search.</p>
<p>A question that has been on my mind lately is as follows; If governments support some companies for bank loans (for example, interest rate cuts, etc.), does this negatively affect their power to create added value for the future? Because in my opinion, bank loan aids given disproportionately to the firm's assets will definitely reduce its power to generate added value. The link with Asset, which I think is organic, is purely instinctive and my own interpretation, it has no basis. A study examining the relationship between bank loan supports and the power to create value will shed light on these questions.</p>
<p>I respectfully request an academic study on this subject or the valuable comments of members who are familiar with economics / econometrics.</p>

CC BY-SA 4.0
2021-11-23T00:05:55.627Z
I don't understand the question. I once took a class on installing photovoltaic solar systems. The contractor teaching the course had many projects but not enough working capital to complete those projects. I said, "Look into taking a line of credit from your suppliers or local bank." In this case if the projects would add value for her business and her satisfied customers then the line of credit would enable the projects to move forward, however, she would share some of the profit from the projects with her creditors as interest payments on the debt used to finance value added projects.
SystemTheory
CC BY-SA 4.0
2021-06-25T19:52:24.017Z
It is not quite clear what you are asking. How would you measure "*power to generate added value*"?
Giskard
<reference-request><banking><asset-pricing><credit>
Does bank loan support affect companies in negative way?
Samet Sökel
# Does bank loan support affect companies in negative way?

(Asked by: username_0 on 2021-06-25)

I'm new to the economics exchange environment. My question may seem amateurish, but I did not find a satisfactory result by doing the necessary literature search.

A question that has been on my mind lately is as follows; If governments support some companies for bank loans (for example, interest rate cuts, etc.), does this negatively affect their power to create added value for the future? Because in my opinion, bank loan aids given disproportionately to the firm's assets will definitely reduce its power to generate added value. The link with Asset, which I think is organic, is purely instinctive and my own interpretation, it has no basis. A study examining the relationship between bank loan supports and the power to create value will shed light on these questions.

I respectfully request an academic study on this subject or the valuable comments of members who are familiar with economics / econometrics.

**Tags:** reference-request, banking, asset-pricing, credit

> **Comments:**
> **username_2**: It is not quite clear what you are asking. How would you measure "*power to generate added value*"?  
> **username_1**: I don't understand the question. I once took a class on installing photovoltaic solar systems. The contractor teaching the course had many projects but not enough working capital to complete those projects. I said, "Look into taking a line of credit from your suppliers or local bank." In this case if the projects would add value for her business and her satisfied customers then the line of credit would enable the projects to move forward, however, she would share some of the profit from the projects with her creditors as interest payments on the debt used to finance value added projects.  

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## 1 answers

### Answer by username_3 on 2021-06-25. Score: 1

> does this negatively affect their power to create added value for the future?

You seem to answer your own question ("*bank loan aids given disproportionately to the firm's assets **will definitely reduce** its power to generate added value*", emphasis added), but the conclusion does not follow from the premise. Basically you have a preconceived idea and expect/request others to provide support for it.

If anything, facilitating bank loans will encourage the *genuine* enterprises to pursue added value, in part because leverage is greater.

It can also lure fraudulent debtors, but that is outside the scope of your question because talking about "*power* to generate added value" is pointless where a debtor does not even have the *intention* to generate added value.

Facilitating bank loans tends to deprive other genuine/deserving applicants of getting a loan. The genuine entrepeneur's advantageous condition is likely to result in him achieving a greater *market share*. Except for scenarios where an inefficient monopoly ensues, that advantage would translate to increasing that entrepeneur's power to generate added value.

> **Comments:**
> **username_0**: Actually I don't wanna seem to answer my own question. I have just some prejudice that makes me think that way. Thank you for your explanatory comment which supports my thoughts. Would you suggest me an academic paper that scrutinizing this subject ? Regards.  

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