Part 1 Flashcards
A decision must be…
Fair
Based on facts
Types of probbies… (3)
Unexpected / unavoidable
Caused by customer / avoidable
Human error
Interviews/visits to customers are important because…
listen - look - visit
spot the warning signs (staff/buildings/machinery/stock
how have things changed since you were last there?
why is financial info important?
assess lending propositions how well company/customer is doing financially other borrowings revealed op losses evident financial accounts valued customers etc
What to do if concerns…
immediate meeting up to date and financial info review bank's security position revise credit limits and repayment terms communication is key control over accounts
what could be improved when problems arise…
stock debtors creditors other assets staff costs capital expenditure
Define Administration
The legal process whereby an official is appointed by the ccourt to administer the affairs of the company.
Duties are to all creditors (both unsec and sec(
Primary focus: RESCUING the company
Routes into administration…
court route (petition by SHs)
out of court route (companies and/or directors must provide notice to any floating charge holder of intention to appoint adminstr - must geet permission)
Effect of administration order being granted…
- no action can be taken by creditor of the company without court’s permission to: collect debt or enforce security; or have the company wound up.
what can an admin do?
raise money for borrowing
grant security
estb subsidiaries
rank and claim in bankruptcy
RUN THE COMPANY IN PLACE OF DIRECTORS
In every lending decision there is a …
Degree of risk. Must be carefully evaluated when lending proposal is being considered
