Beacon Ltd. is a large creditworthy company operating in Accra. It is an export-oriented unit, dealing in exclusive embroidered shawls. The floods in Accra have created many problems for the company. Many craftsmen and workers have been dislocated and raw material has been destroyed. The firm is therefore, unable to get an uninterrupted supply of raw materials and the duration of the production cycle has also increased. To add to the problems of the organisation, the suppliers of raw materials who were earlier selling on credit are asking the company for advance payment or cash payment on delivery. The company is facing a liquidity crisis. The CEO of the company feels that taking a bank loan is the only option with the company to meet its short-term shortage of cash. As a finance manager of the company, what is the alternative to bank borrowings that the company can use to resolve the crisis. What is the duration for which the company can get funds through this instrument?
Beacon Ltd. is a large creditworthy company operating in Accra. It is an export-oriented unit, dealing in exclusive embroidered shawls. The floods in Accra have created many problems for the company. Many craftsmen and workers have been dislocated and raw material has been destroyed. The firm is therefore, unable to get an uninterrupted supply of raw materials and the duration of the production cycle has also increased. To add to the problems of the organisation, the suppliers of raw materials who were earlier selling on credit are asking the company for advance payment or cash payment on delivery. The company is facing a liquidity crisis. The CEO of the company feels that taking a bank loan is the only option with the company to meet its short-term shortage of cash. As a finance manager of the company, what is the alternative to bank borrowings that the company can use to resolve the crisis. What is the duration for which the company can get funds through this instrument?
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