Jeremy Chan has come to you for advice. Earlier this year he opened a movie prop rental

Question:

Jeremy Chan has come to you for advice. Earlier this year he opened a movie prop rental business with special credit terms for items to be used for less than a month. Business has been very good. Chan is sure it is because of his competitive prices and the unique credit terms he offers. His problem is that he is short of cash, and his loan with the bank has grown significantly. The bank manager has indicated that he wishes to reduce Chan's because she is worried that he will get into financial difficulties.
Required
1. Explain to Chan why he, in your opinion, is short of cash.
2. Chan has asked you to explain his problem to the bank manager and to assist in asking for more credit. What might you say to the bank manager to assist Chan?
Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...