Whoever owns a metal furniture manufacturing organization, seeks funds in order to help fund his business's growth. He's arranged a mortgage with a life insurance firm to finance the accession to his plant. He is now attempting to organize a working capital loan with his bank manager. There were significant pressures on manufacturers of metal furniture in recent years and the cost/price squeeze has forced many weaker producers out. Talich Fabricating Inc. lived due to the managerial competence of the owner who anticipates a big sales increase, since the number of opponents has decreased considerably.
He believes that this reduced pressure will enable him to raise costs to improve his profitability, which has suffered during the sector shake out. The loan proposal must be evaluated by the bank manager in view of a head office memo proposing the loans be restricted to proposals offering the highest return with the least danger. As the bank manager, students should value the loan proposal contemplating attributes of the person in charge, market environment and the firm’s ability of repayment along with collateral that is available.
Publication Date: 11/30/1999
This is just an excerpt. This case is about Finance
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