What are some of the reasonable steps the supplier

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Reference no: EM133312962

Assignment:

Mona faces challenges and opportunities with her small business, Spa & Bridal Salon. She already has 2 mortgages on her home to support it. Some of her suppliers allow her to carry their products on consignment only, but many do not. Also, Mona already maxed out her line of credit with the bank.

Mona has a new line of hair products that she thinks has potential for the bridal market, which is profitable nowadays. The Blow-set machine, which she could buy or rent from the supplier. Mona plans to carry this product for at least three years. She has calculated that the cost of buying the machine at the low financing rate offered by the manufacturer to preferred customers is the same as renting it for 23 months. Thus, she wants to buy the machine, but the manufacturer is rightfully concerned about her debt situation.

Mona asks for your help as a Financial Advisor.

What are some of the 'reasonable' steps the suppliers and lenders (creditors) need to take to recover the debt for either the house or inventory materials should Mona default?
How about reminding Mona of these potential consequences will shift their thinking to risk management.
Advise Mona about risk management. steps
Cite some contingency plans

Reference no: EM133312962

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