Urgent: best way to obtain bank loan for the company

260 views 1 replies

Arun Dhariwal is the president and principal stockholder of ABC Inc. The business is applying for a INR 1000,000 bank loan for expansion. Arun believes he is more likely to get approved for the loan if the business's balance sheet looks good. He is considering the following options for improving the owner's equity of the business in order to obtain the loan:

1. Issue INR 500,000 of common stock in exchange for cash to a friend who is interested in investing in the company. This would increase assets (cash) by INR 500,000 and increase owner's equity by INR 500,000.

OR

2. Transfer INR 500,000 of Arun's personal land to the business and issue common stock to herself. After the loan is obtained, Arun will transfer the land back to herself and zero out the common stock. This would temporarily increase assets (land) by INR 500,000 and increase owner's equity by INR 500,000.

Analyze the alternatives from an ethical and a business point of view.

Replies (1)

There is more chances of getting loan based on turnover, profit, stock/inventory level and debtors and creditors position, if u have good balance of cash on hand then there will be no requirement of loan, increasing fixed assets temporary will also not serve the purpose, you can ask for loan based on orders on hand and parameters mention at first.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
16 June 2026
Sr. Associate / Assistant Manager | TAS / FDD

Boutique Investment Bank & Transaction Advisory Firm

Gurgaon

CA

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details
Company
24 June 2026
Chartered Accountant - GST & Direct Tax

APL

Mumbai

CA

View Details
Company
Featured 15 June 2026
Senior Auditor

N. Dhawan & Co

New Delhi

CA Inter

View Details
Company
20 June 2026
Assistant Accounts Manager

Fintax Professionals

Gurgaon

CA Inter

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details