Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Loan Presentation Information Example Borrower: ABC Distributor, Inc. Nature of Business: Wholesale Beer Distributor for Anheuser-Busch Commitment Requested: Purpose of Credit: 1. Increase Revolving Line of Credit to $600,000 (Maximum: 50% of A/R + 50% of Inventory) Working capital to support inventory needs Collateral Description: Pricing: Inventory, Accounts Receivable Prime + 1% Method of Repayment: Both Loans Loan Covenants: Both Loans Primary: Cash Flow from Operations Second: Sale of assets 1. Current Ratio = 1.5 or greater 2. Debt ratio (TL/TA) = 50.00% or less Guarantor: Owner and spouse—Sam and Chris Smith Existing Relationship: company checking account: average 1 year balance = $300,000 Sam/Chris checking account: average 1 year balance = $1,000 Loan Experience: Loan Line of Credit Equipment Loan Mortgage Commitment $400,000 $1,000,000 Outstanding $200,000 $_______ $5,000,000 $_______ Pricing Comments Prime + 1% Request to increase to $600,000 6% 10 year amortization, 3 year balloon—-- 24 monthly payments completed 7% 20 year amortization, 10 year balloon—36 monthly payments completed Financials (Auditor: Ethical Enron Accounting Firm) Auditor’s Opinion Year Current Assets Current Liabilities Net Working Capital Unqualified 12-31-x5 $4,000,000 $2,500,000 $1,500,000 Unqualified 12-31-x4 $5,000,000 $4,000,000 $1,000,000 Unqualified 12-31-x3 $4,900,000 $3,500,000 $1,400,000 Total Assets Total Liabilities Equity $14,000,000 $7,000,000 $7,000,000 $15,000,000 $8,000,000 $7,000,000 $15,000,000 $8,000,000 $7,000,000 Cash “Friendly” Debt $400,000 $0 $500,000 $0 $450,000 $0 Net Sales Depreciation Net Income $40,000,000 $480,000 $280,000 $40,000,000 $500,000 $100,000 $37,000,000 $510,000 $150,000 Dividends Owner Compensation $0 $200,000 $0 $90,000 $0 $110,000 Current Ratio Debt Ratio (TL/TA) 1.6 50.00% 1.25 53.33% 1.4 53.33% Guarantor Personal Balance Sheet: Sam and Chris Smith Date: Cost or Market: November 26, 20x5 Market Assets Cash $10,000 Retirement Acct. $100,000 Personal Residence $500,000 Value of Business $2,800,000 Other (e.g., jewelry) $10,000 Annual Debt Service: $ 42,000 Liabilities Credit Card Debt Mortgage, first Mortgage, second Net Worth $20,000 $400,000 $100,000 $2,900,000 Contingent Liabilities: ABC Dist. Pertinent Loan Officer Comments: 1. Sales were flat primarily due to problems associated with a change over in computer systems which resulted in difficulty delivering product to some customers. Sam expects sales to increase to $47 million next year. Futhermore, Sam expects the Gross Margin to improve from 23% to 24 % which should improve overall profitability and cash flow 2. ABC distributor was established by Sam Smith in 1990 and has been a loyal customer of our bank since 1995.