Why not borrow heavily when interest rates are so low? Here’s why + MORE Apr 20th

World stock markets lose ground; oil prices retreat as Kuwait strike ends

(Illustration by Nicholas Little)
Q: Given today’s low interest rates, should I max out my business’s bank loan to bolster my cash flow?
“It’s true, you don’t pay much service for debt if you do a short-term draw while the interest rate is low,” says Jeffrey Sherman, a speaker on corporate finance, the author of Cash Management Toolkit for Small & Medium Businesses and the chief financial officer at Toronto-based Atrium Mortgage Investment Corp.
“But eventually you’ll have to pay it back, and interest rates could be up again. That is a risk, but the real problem is if you draw up all your bank loan, you’d have no extra borrowing capacity in case of an emergency. This idea of resilience is very important, because you want to be prepared for bad things to happen.
“An example: After the recession of 2008, numerous Canadian companies with strong and viable businesses suddenly found the banks were pulling back their loans because [the banks had] made strategic decisions to cut back in certain industries to avoid exposure…

A man sits in front of an electronic board displaying share prices at a securities brokerage in Beijing, China, on Monday, March 7, 2016. (Qilai Shen, Getty Images)
BEIJING —  The Chinese government’s latest plan to perk up its slowing economy is based on the humble rice cooker and luxury toilet seats.
The development plan issued this week strikes a blow for China’s consumers, calling for better products to help create an economy driven by domestic consumption instead of trade and investment.
The Cabinet document lays out an unusually detailed wish list: better electric rice cookers, kitchen appliances, “smart toilet seats” and smartphones.
China makes most of the world’s consumer electronics, furniture and toys but domestic brands available at the prices its poor majority can afford are of uneven quality. The country has been plagued by repeated scandals over shoddy or fake food, medicine and other goods.
The latest plan says its goals are part the ruling Communist Party’s campaign to make the state-dominated economy more productive by shrinking bloated companies in steel and other industries…