Negotiate 2 bank credits: one for intermediate trade with the USA (Import of iPhones 7) and...

Negotiate 2 bank credits:

one for intermediate trade with the USA (Import of iPhones 7) and

second – for the construction of the iPhone plant in Kyiv.

Suggest your terms and conditions: (sum, currency, duration, interest rate, procedure of drawing and reimbursement, collateral – if any etc.)

Expert Solution

While negotiating credit with the bank, appropriate startegy has to be used for ensuring success.

Also for suggesting your terms and conditions, you need to consider the bank's objectives as well as the restrictions put by bank on you for meeting the bank's objectives

So prepare a list consisting of restrictions by bank and prioritize the ones you can meet easily without compromising on your company objectives/strategy.

Also identify the restrictions which are not very crucial and ask the bank to relax them.

Bank usually considers the following :

Maintenance of balance sheet: minimum net working capital or current ratio will be set or restriction on further borrowings

Preservation of assets: Assets are the collateral so restrictions will be places on disposal of assets

Control of cash flow: Analysis of cash flow will be done ie whether EBIT is enough to cover the loan. Variability in EBIT can trigger the risk of default, hence potential losses need to be avoided.

Mainly for negotiating credit you need to have a strong balance sheet with favorable ratios and a strong earnings forecast

jeff jeffy answered 3 hours ago

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