Advanced Medical Technology Corporation Essay

2132 Words Feb 19th, 2011 9 Pages
Harvard Business School

Rev. December 1, 1991

Advanced Medical Technology Corporation
Early in April 1986, Tom Winter, vice president and loan officer of the Western National Bank of San Francisco, California, was reviewing a loan request for $8 million from Peter Haskins, president of Advanced Medical Technology Corporation. Advanced Medical Technology Corporation (AMT) developed, manufactured, and sold scientific medical instruments, needles and catheters that allowed rapid and less invasive access to a number of different organs and vessels. These products represented an alternative to traditional surgical procedures and allowed analysis or corrective treatment with less risk and trauma and at lower cost. An example of the
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Haskins brought to the bank. Mr. Haskins was thoroughly dissatisfied with the company’s current loan arrangement with the Sunnyvale Bank, from which it had a credit line of $6 million with accounts receivable and inventory pledged as security. He thought that Mr. Flint, the loan officer at Sunnyvale, made no effort to understand the company, and was constantly making suggestions that seemed inappropriate. He routinely visited AMT once every six months. While the visits were cordial, they were of very little value to Mr. Haskins. Furthermore, Mr. Haskins felt that the bank had been quite arbitrary in selecting the receivables that it would accept as collateral and in setting the percentage of inventory that it would advance as a loan. The restrictive attitude on the bank’s part was limiting the company’s ability to expand at exactly the time that increased volume seemed to be the key to profitability. Mr. Haskins was perfectly willing to pledge the company’s accounts receivable, inventory or anything else that the bank thought would be desirable security as long as the arrangement was fair to the company and specific enough so that he could count on having the funds available when he needed them. Mr. Winter explained that the bank was always interested in sound loan proposals from companies that showed the promise of developing into good accounts. He promised to study the request and said that he hoped to visit the company in the near future. Before going to the