Teaching note for product 9B13N010.

Garry Halper Menswear Limited (GHM) is a medium-sized manufacturer of superior-quality men’s suits and jackets that up to now have largely been distributed in Canada. The firm has landed a very large order for men’s suits with Sutton’s in the United States. To meet the order, the firm has decided to import partly completed suits from China. The treasurer of GHM must assess the financing needs and related risks that result from this large increase .....more

Nancy Featherstone, an account manager with the Royal Bank, was assessing a client request for an expanded operating line of credit. Ashleigh Cosmetics Ltd., a Montreal-based manufacturer and distributor of women's cosmetics, planned to launch a new red lipstick line called "Marilyn M." Ashleigh had applied for a $2,000,000 increase in its authorized operating line for a total of $4,500,000. The estimated increase was based partly on .....more

The treasurer of a Toronto men's wear manufacturer attempts to negotiate bank financing for his company. The task is made more complex by the need to purchase material from Hong Kong and sales made to the United States and Italy.

An account manager is evaluating several options for dealing with a problem loan: restructuring the bank's loans, liquidating assets of the company, or selling the business as a going concern.

An account manager of a large bank is reviewing a request for term financing to assist with the repurchase of a minority interest in a large trucking company. The firm is considering a term loan as well as an investment by the venture capital arm of the bank. An equity investment would require agreement on the form of the investment and the price to be paid for any stock issued.

A bank account manager is reviewing the risk and credit facility for a specialty food store operator. The case permits a size-up of the company and provides detailed information to decide the loan rate that should be charged.

The general manager of a financial services company is examining a request for a loan to finance the completion of a hotel on the ocean shore in Kenya. Projected costs and revenues for the first three years are presented. The manager is trying to assess the validity of these estimates and whether he should recommend the loan.