Q6. Small businesses are generally operated by the owner/operator concept. There is also a tendency that finances and cash flows are mixed between personal and that of business. This has often led to cash flow mismanagement and sometimes loan default. Explain how a credit officer should proceed in the evaluation of credits to small businesses.

Q6. Small businesses are generally operated by the owner/operator concept. There is also a tendency that finances and cash flows are mixed between personal and that of business. This has often led to cash flow mismanagement and sometimes loan default. Explain how a credit officer should proceed in the evaluation of credits to small businesses.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

4. Consider the following two statements (1) Businesses should deny credit to customer to eliminate the costs of collecting trade receivables. (2) Trade receivable factoring could provide immediate funds to businesses after credit sales. Which one of the following combinations relating to the above statements is correct? A (1) True (2) False B (1) True (2) True C (1) False (2) True D (1) False (2) False
Which of the following is the incorrect statement about Banking? Banking relates with lending money for personal need for profit Banks provides equipment purchase loan The Banks helps to give long term and short-term loans only Issuing cheques is the secondary objective of banking
1. What makes Information important in credit and collection?2. How does technology enhance the collection process of a business?3. What is the function of Credit and Collection Department in abusiness?4. Provide reasons why company offers credit to their customers.justify all your answer.
Your company provides credit to customers. Someof these customers default on their loans, with verynegative implications for you. Describe how you coulduse discriminant analysis to learn what distinguishesthe customers who default on their loans from thosewho pay back their loans. How might you use such amodel?
2.-Credit selection involves the application of techniques to determine which customers should receive credit from the company, according to its credit standards. True or false?
Overall, do you believe that extending credit to customers is a good business practice? Why or why not?
Loan structuring is the process of designing a loan to satisfy the financing demands of a business borrower. At the same time, it tries to protect the lender against losses caused by the borrower's refusal to repay the debt, as well as the interest and fees associated with it. Determine the process of credit facilities structuring that takes place in the bank.
Question 2 Explain the following different types of credit advances and when firms use it. (i) Bank overdraft (ii) Syndicated loan (iii) Factoring b) Discuss the advantages and disadvantages of factoring service to businesses?
Effective credit management involves establishing credit standards for extending credit to customers, determining the company’s credit terms, and setting up procedures for invoicing and collecting past-due accounts. The following statement refers to a credit management policy. Select the best term to complete the sentence. The minimum financial strength a customer must have to be granted credit is indicated by the company’s . Consider the case of Universal Exports Inc.: Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 1/10, net 30. If a customer bought $150,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $157,500 $148,500 $120,000 $127,500 If the customer paid off the account after 15 days, Universal…
Which statement best describes the role of a credit agency? OIt tracks the use of credit for lenders. It predicts future earning potential for lenders. OIt teaches how to make smart financial decisions. OIt shows how saving money makes financial sense.
A bank is considering implementing a business rules management system for assessing the riskand creditworthiness of individuals as part of the loan approval process.• List and explain 3 benefits of such a system?• List 2 potential legal or ethical issues that might arise in the use of such a system
(Urgent) Credit Analysis & Lending Management Doubtful debts are those debts which is unlikely to be able to collect, bank hiring a collection agency use to recover funds or collecting delinquent debts. Banking primary focus is running business, but a collection agency's primary focus is to collect debts. Therefore, examine the advantages and disadvantages in appointing a third party in collecting bad debt in Malaysia.

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