Bank Loan

If your firm wishes to take out a short-term bank loan by drawing against your $2.5 million line of credit, enter the amount desired (in thousands of dollars) under Bank Loan on the decision form.  Short-term loans are made for a period of one quarter, and repayment is automatic during the quarter following that in which the loan is made.  The annual interest rate will be the short-term rate that is available during that quarter to a company with your credit standing. Your account will automatically be charged one-fourth of the annual rate during the quarter in which the loan is outstanding.

Bank loans are secured by inventory and receivables, and may not exceed 50 percent of the value of receivables plus inventory at the end of the previous quarter.  Your line of credit requires an annual cleanup, so a loan request will be denied if there has been a loan outstanding during each of the past three consecutive quarters.

Bank loans are available only to the parent company.

Maximum loan:  50 percent of receivables plus inventory

Maximum loan:  0 if a loan was outstanding in each of the previous three quarters

Limits:  0 to 2500 (in thousands of dollars)