Sitting by the campfire, Roel looked at Dirk with eyes filled with confusion.
What’s going on? When in the world did our Ascarts get involved with the Sorofyas?
Furthermore, to actually instruct Dirk to inform him right away if the Sorofyas were to come knocking, it must be something pretty serious. It can’t be that… Carter borrowed money from them in his younger years?
Roel felt a chill running down his spine. It was not that his imagination was running wild… Well, it sort of was running wild, but he couldn’t be blamed for that! There were simply far too many nobles in debt to the Sorofyas!
Developing a fiefdom requires a massive influx of money and resources, and there are very few noble houses financially stable enough to fork it all out at once.
In a sense, it was similar to how people bought houses in Roel’s previous world. There were tycoons who simply paid the full sum right away, but most people had no choice but to take out a loan first before slugging it out to pay the debt off in installments.
It was mainly the banks that provided financing services in his previous world, but in this world, this job was taken up by the merchant associations. Most fief lords would make sure to build up a good relationship with major merchant associations to ensure that they could get funding whenever they needed to work on a major project.
To put it simply, the merchant associations lent out money to the fief lords, and the fief lords repaid the debt, with a bit of interest, over years or even decades using the taxes they collected.
This was an oversimplification of how things worked though. More often than not, there was much more to talk about at the negotiation table.
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For example, the fiefdom could benefit from the connections and technological expertise that merchant associations had, such as procurement of manpower and tools for the construction of advanced facilities.
Similarly, the merchant associations could request favorable terms for its operations in the fief, such as lower taxes or the implementation of certain business laws that benefited them. Even a simple endorsement from the fief lord could bring about great benefits.
All in all, the successful development of a fiefdom could bring about great benefits to the fief lord and the merchant associations that were involved in it. But, of course, there were great risks involved as well. There was a chance that the investments put into the fief would fail to generate proportionate returns, and that would be a huge blow to both the fief lord and the merchant associations.
The fief lords that had failed to develop their fiefdom ended up becoming poor, resulting in their standing and influence diminishing significantly. However, the merchant associations had it much worse. Those who invested small would lose all of their capital, w
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