How the collection and purchases schedules are related to the borrowing needs of the corporation?

Answer 1

If you can prepare a cash-flow forecast estimating when you will collect monies from customers and when you need to pay for purchases, you can time the drawdowns of the loan you're applying for, and the amount. If the bank is willing to lend you $100k, say, but you don't need all of it now, you shouldn't arrange for the full drawdown now, cos you'll incur more interest. You can arrange for the drawdowns in the periods when you will expect to need the cash.