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Bank Lending (Loan Propsal) - Essay Example

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Bank Lending (Loan Propsal)

If the company is afforded a loan, it should be loaned the money with special restrictions.
The business for which the loan is being applied is a family printing business. Old Mr Lewis is the director, and he is assisted by the two co-directors of his sons. This business was started five years ago by Mr Lewis, after having a twenty-year stint as a technical supervisor at a competitor printing company.
That being said, his technical4 knowledge with regard to printing is superior. He emphasizes quality, and as such all of the machines used by Lettera must be imported from Germany as per Mr Lewis's predilection.
Both of Mr Lewis's sons became involved with the business's management5 straightaway after they finished with school. It is Mr Lewis's hope that the company be inherited by hs sons. The older son was involved with the business since its inception whilst his second son has been involved for the past two years.
Actual printing activities are not the business of either of the sons. Rather, they deal with the financial management and general administration ends of the business. In addition, they also take care of marketing6 of Lettera's services. This division of responsibility does well according to Mr Lewis:
"I have worked with printing machines my whole life and
enjoys it. I hate paper work. My sons, however, know
nothing about machines. As a result we form a good team
by not infringing on each others areas of responsibility."

The business provides printing for: wedding cards; visitors' cards; letterheads; invoice books and other accounting books and forms; calendars; pamphlets; yearbooks; brochures; and newsletters.

According to balance sheets, the business did not do remarkably well in the past, however the company's position did improve quite a bit within the past year. This can be attributed to the fact that Lettera is the only printing business in the neighborhood where it does business. This is because a major print franchise which was located nearby closed down.
Mr Lewis sees the local business as the principal source of business for Lettera's services. This is seeing as how Lettera has gotten very few requests for the printing of certain items since the inception of the company five years ago.
Mr Lewis thinks that the local businesses would do well to have more business done at his company, and believes that this could be a possibility for the future. He made a point of mentioning this in his ...Show more


As a business banker of XYZ Bank involved with business1 applications, having reviewed all of the information presented to me I cannot, in good conscience, recommend Lettera Pty Ltd for a loan.2 In my expert opinion, after having compiled information for the regional credit department of XYZ bank for Lettera Pty Ltd-in order to purchase a building of $400,000 close to the existing premises that the company3 is operating from at present-I am of the mind where I do not recommend this company to receive the loan.
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Bank Lending (Loan Propsal)
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