Jillian Michaels and Dee Childress worked for several years as sales representatives for Xerox Corporation. During this time, they became close friends as they acquired expertise with the company’s full range of copying and printing equipment. Now they see an opportunity to put their expertise to work and fulfill lifelong desires to establish their own business. Navarro Community College, located in their city, is expanding, and there is no copy center within five miles of the campus. Business in the area is booming, office buildings and apartments are springing up, and the population of the Navarro section of the city is growing.

Michaels and Childress want to open a printing, copying, and shipping center, similar to FedEx Kinko’s, near the Navarro campus. A small shopping center across the street from the college has a vacancy that would fit their needs. Michaels and Childress each have $35,000 to invest in the business, but they forecast the need for $200,000 to renovate the store and purchase some equipment. Xerox Corporation will lease two large printers to them at a total monthly rental of $6,000. With enough cash to see them through the first six months of operation, they are confident they can make the business succeed. The two women work very well together, and both have excellent credit ratings. Michaels and Childress must borrow $130,000 to start the business, advertise its opening, and keep it running for its first six months.

Requirements
Assume two roles: (1) Michaels and Childress, the partners who will own Navarro Copy Center; and (2) loan officers at Synergy Bank.

1. As a group, visit a copy center to familiarize yourselves with its operations. If possible, interview the manager or another employee. Then write a loan request that Michaels and Childress will submit to Synergy Bank with the intent of borrowing $130,000 to be paid back over three years. The loan will be a personal loan to the partnership of Michaels and Childress, not to Navarro Copy Center. The request should specify all the details of the plan that will motivate the bank to grant the loan. Include a budget for each of the first six months of operation of the proposed copy center.

2. As a group, interview a loan officer in a bank. Write Synergy Bank’s reply to the loan request. Specify all the details that the bank should require as conditions for making the loan.

3. If necessary, modify the loan request or the bank’s reply in order to reach agreement between the two parties.