Ludwig built a shipping empire using oil charters as loan collateral
David Senra · The Invisible Billionaire: Daniel Ludwig · Feb 23, 2024 · at 5:11
Host David Senra explains how industrialist Daniel Ludwig created the two-name paper financing model in the 1930s to acquire oil tankers without personal collateral.
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“The idea was to use other people's credit. First, he'd go to an oil company and persuade it to grant him a long-term charter to haul its petroleum. This done, he would go to a bank where using the charter as collateral, he would take out a loan to obtain a ship to haul the petroleum. Instead of paying Ludwig, each oil company would make the charter payments directly to the bank, which would then deduct the loan payment and put whatever was left into Ludwig's account. This allowed Ludwig to build or renovate tankers without having to put up collateral or use his own credit.”
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