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Cash or Finance?

Cash or Finance?

Didn't find your answer?

Am I missing a trick here?  Please could someone tell me what would be the reason for financing a large purchase of stock with a loan when there is plenty of cash in the bank and the company already has a good credit history and rating? 

My directors asked me this question and I simply don't know the answer. 

Any comments gratefully received.

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By johngroganjga
07th Oct 2014 16:14

Was it imported stock?

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By Gem7321
07th Oct 2014 16:20

Yes mostly

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By johngroganjga
07th Oct 2014 16:29

Well that might be part of the explanation.  Overseas vendor may have been relying on letters of credit etc. which would have required a bank's involvement.

But international trade finance is not my specialist area.

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By Gem7321
08th Oct 2014 09:29

Thanks John I had not considered this. 

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