Lien on the manufacturing equipment to secure the loan

Reference no: EM133609849

Question: HGG has been pre-approved for financing with their local bank, Texas National Bank, for a collateralized loan of up to $120,000 to purchase new manufacturing equipment. The loan was offered at the current market rate of 9 percent annual interest, with repayment in equal annual installments over the 6-year loan period. If Hoo's Got Game? uses this bank financing option, it would receive the loan proceeds on July 1, 2X02, use the cash to purchase equipment from a vendor of its choice, and begin paying off the loan next year, with the first payment to be made July 1, 2X03. Texas National Bank would require a lien on the manufacturing equipment to secure the loan.

Reference no: EM133609849

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