Bud Is Unable to Obtain a Loan Without Some Form

question 35

Essay

Bud is unable to obtain a loan without some form of additional reassurances. Bud comes to you for assistance. You are willing to help Bud, but you wish to protect yourself from liability as much as possible. Would you prefer a surety or a guaranty? The bank issuing the loan also wishes to protect itself as much as possible. Would the bank prefer a surety or guaranty? If your oral assurances are enough to solidify the loan, has a surety or guaranty been formed?

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Definitions:

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.

Financial Management

The practice of planning, organizing, directing, and controlling the financial activities such as procurement and utilization of funds of an enterprise.

Company's Funds

The assets or money that a company possesses for the purpose of conducting its business activities.

Objectives

Guideposts by which managers define the organization's desired performance in such areas as new-product development, sales, customer service, growth, environmental and social responsibility, and employee satisfaction.