what if the bank was holding inventory as Collertal. what are some of things they will need to look into
2007-03-16 12:37:20 · 1 answers · asked by bdf s 1 in Business & Finance ➔ Other - Business & Finance
If a bank was to hold inventory as collateral they would be interested in:
1. How easy the inventory is to sell - Keep in mind if they seize the inventory that means the company was having problems making money, must likely due to difficulty in selling the inventory
2. How valuable the inventory is
3. Controls and security they can have in place to make sure they can collect the inventory in case of default - This may even involve a trustee to act as a controller over the company's warehouse
4. Covenants (restrictions) that would allow for early identification of potential default under which a controlled warehouse/inventory situation would begin.
2007-03-16 18:41:06 · answer #1 · answered by MagicalMke 4 · 0⤊ 0⤋