It is not necessarily common amongst ASX listed companies (I never said it was) and in fact that is the whole reason why it is causing unnecessary drama. It is common for small and medium businesses to use a facility like this - perfect for BIG in it's initial growth stage. Given they have such a great product they have actually outgrown the facility (which was never used to facilitate EVERY client). Cash receipts from services not rendered are recognised as a liability on the BS as deferred revenue so not sure what your point is.
They only have security over BRTV to the extent of the sponsorship agreement (i.e. limited):
"FC Capital chief executive Brad Prout confirmed that FC Capital held a "General Security Agreement which secures the performance obligations of BIG Un under the sponsorship agreement".
He said it did not secure the payment obligation of Big's customers who have received video content and agreed to pay by instalments.
"That SME customer payment/credit risk is then ours – which is our core business."
So again, not sure why you are classifying this as a loan given the payment/credit risk is not theirs. The requirement is that a video and paying client does eventuate which has always been the case given the scale and success of the product - it is reasonable to consider this assumption prudent and sustainable at this point in time and as per accounting rules. If somehow they tap out the global market and can't find anymore clients then they will be long gone from financing arrangements and swimming in their own capital, so I don't see this being an issue at all.
'Quite simply' your explanation is not correct.
Because a sufficient number under the agreement do accept to meet the terms of operating cash receipts as well as actual recognised revenue in the P/L and future deferred revenue that is shown on the BS to be recognised in future periods as real revenue contributing to real profit. And of course a large percentage of customers are not even signed up under the agreement. So you can stay surprised if you want but perhaps instead of telling others to 'DYOR' you do some semblance of your own.
