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One of the dangers of running your business into the ground is, of course, the threat of acquisition. Acquisitions are very common among powerful corporations, as well as savvy investors that are waiting for bubbles to burst and cheap assets to be had. If you have a bad credit business, acquisition lenders will certainly be hot on your trail!

It is important to understand, though, that this serves a vital economic function; it serves to place assets in the hands of those who are most willing and capable of generating usefulness out of them for the lowest price possible. Bankruptcy forces worthless (or incredibly over-valued) assets to be available to the market at a market price; however, it often turns out that the market price is much lower than usual, and because this market is both very sporadic and produced by de facto poor producers, it tends to lead itself to easily exploitable market inefficiencies that seem to be quickly cannibalized by investor sharks, and their bad credit business acquisition lenders..

It should be remembered, once again, that this is not necessarily a bad thing either. T,he exploitation of market inefficiencies may appear grossly unfair and even problematic to the economy, but the reality is that the inefficiency itself, not the act of taking advantage of them, is the cause of the problem. When poor business models, unfavorable social changes, or over-regulation result in a sudden disequilibrium of market prices that plunges many downward, it must be understood that these factors and these factors alone are to blame; not the speculators that take over them afterwards.

This Business article was written by Mark Karavan on 3/9/2010