(6 pages of text)
James and Serena Udderlie were preparing a loan application to the Confederation Bank of Canada. They were requesting a $160,000 term loan, in addition to an operating loan, for the potential opening of a Cow's ice cream and clothing franchise. They needed to develop proforma income statements and balance sheets for the store's first two years of operation. They also wondered what collateral, if any, they would be able to provide the bank to secure against a loan, and what other terms the bank might deem necessary.
- To provide students with the opportunity to undertake the required analysis for a bank loan: a size-up of the firm's environment and competitive position; a forecast of the future financing needs; and an assessment of how the Bank can mitigate its risk through collateral and covenant requirements.
- To provide students with insights into entrepreneurial activity. Emphasis is given to the marketing research completed prior to the entrepreneur decision to go ahead with the idea.
- To expose alternative sources of financing, specifically government-sponsored loan programs.
Accommodation & Food Services
Canada, Small, 1994
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