Loan Guarantees Can Also Be Extended To Large Borrowers by Morris Billy

Loan guarantees can also be extended to large borrowers for national security reasons, to help companies in essential industries, or in situations where the failure of a large company will harm the larger economy, For example, Chrysler Corporation, one of the "big three " US automobile manufacturers, obtained a loan guarantee in 1979 amid its near-collapse, and lobbying by labor interests. The loans are made by private lenders with the caveat that the government will pay off the loans if the company defaults on them.