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Case Link Question (4) Directions: Click the Case Link above and use the information provided in the Andrew Chan case to answer this question: You are considering a $200,000 loan to Dr. Chan's medical practice for new equipment. What value would Dr. Chan's unsecured guarantee add to this loan request? Dr. Chan's adjusted net worth shows that his guarantee would provide adequate support for the loan, and the guarantee would encourage Dr. Chan to ensure repayment of the business loan. O More information is needed about Dr. Chan's medical practice in order to evaluate the strength of his guarantee. Based on his income, liquid assets, and adjusted net worth, Dr. Chan's guarantee would provide very strong financial support for the loan. Given the level of illiquid assets on the personal financial statement, Dr. Chan's guarantee would provide no financial or psychological value for the lender. PERSONAL FINANCIAL STATEMENT Borrower name: Dr. Andrew Chan Address: 25 Colby Circle Co-borrower name: Address: uuuu I (we) make the following statement of all my (our) assets and liabilities as of the 10th day of February, 2083 and give other material information for the purpose of obtaining credit with you on notes and bills bearing my (our) signature, endorsement, or guarantee. I (we) hereby certify that this statement presents a true, complete, and correct statement of my (our) financial condition as of the date shown and does not omit any pertinent information. I (we) understand that alimony, child support, and separate maintenance need not be revealed, unless I (we) wish to have it considered as a basis for repaying the requested credit. I (we) understand that misrepresenting information on this (or the attached) statement is a criminal offense under federal law. Instructions: Complete all schedules on pages 2 and 3, then enter any additional information on this page. Complete all blanks; enter 0, no, or none if appropriate. ASSETS LIABILITIES & NET WORTH Short-term and demand notes payable to banks and Cash on hand and in banks (Sch. 1) $ 35,000 others (Sch. 10) $ Government securities (guaranteed) Margin debt (Sch. 11) $ Listed securities (Sch. 2) $ 87,500 Unpaid taxes and interest due this year Unlisted securities (Sch. 3) Other current liabilities (list below) Accounts and notes receivable (Sch. 4) $ TOTAL LIQUID ASSETS $ 122,500 Residential real estate (Sch. 5) $ 925,000 Residential real estate mortgages (Sch. 5) 5 661,563 Non-residential real estate (Sch. 6) S Non-residential real estate mortgages (Sch. 6) Cash value of life insurance 60,000 Auto loans (Sch. 7) 5 69,000 Automobiles (Sch. 7) 75,000 Other loans and obligations (Sch. 12) Household furnishings & personal property 433,000 Credit cards (Sch. 13) $ 19,000 Other assets (Sch. 8 & 9) Other (list): Retirement accounts (401(k), Keogh, IRA, etc.) TOTAL LIABILITIES $ 749,563 TOTAL ASSETS $ 1,615,500 NET WORTH $ 865,937 ANNUAL INCOME ANNUAL EXPENSES Salary $ 250,000 Mortgage payments, residential RE (Sch. 5) $ 70,488 Interest $ 2.500 Mortgage payments, non-residential RE (Sch. 6) $ Dividends $ 3,000 Other loan & credit card payments (Sch. 7, 10, 12, 13) $ 23,832 Residential real estate income (Sch. 5) $ 24,000 Required partnership contributions Non-residential real estate income (Sch. 6) $ Taxes: Income, real estate, etc. Other business income (Sch. 3 and 8) S Insurance premiums $ 4.250 Other recurring income (Sch. 9) $ Living expenses, etc. $ 50,000 Non-recurring or variable income Alimony, child support, separate maintenance Commissions and bonuses Charitable contributions s 25,000 Other: Other contractual obligations (tuition, etc.) Other: Other (attach list) TOTAL 279,500 TOTAL 173,570 PERSONAL INFORMATION GENERAL INFORMATION Enter Yes or No Business or occupation: Are any assets pledged? List. Physician, general practice Home and condo Yes Partner or officer in other venture(s) (List): Are you defendant in any suits or legal action? No none Have you ever made a composition settlement? Name(s) and age(s) of dependents Have you taken bankruptcy? If yes, when? NO Patricia (spouse) 38, Katherine (11), Clifford (8) Are any assets held in trust? No CONTINGENT LIABILITIES Enter Yes or No Circumstances and potential liability As endorser, co-maker, or guarantor? No Pending legal claims against you? No No Co-borrower's signature Borrower's signature Andrew Chan, MD 2/10/13 Date Date PERSONAL FINANCIAL STATEMENT, continued Andrew Chan, MD SUPPLEMENTARY SCHEDULES 1-6 (Attach separate sheets if necessary) Sch. 1, Assets: List cash on hand if significant, and all bank accounts Ownership Financial institution Type of account Balance (Individual, Joint) Omega Bank Checking $7,500 1 Omega Bank Money Market $27,500 Interest income last year Amount pledged To whom pledged If pledged, amount pledged and to Sch. 2: Assets: Listed securities (other than guaranteed government securities) Face value (bonds) Description of security or Ownership Income received or # of shares managed by (Individual, Joint) last year 882 shares Venture Fund C J 94 shares Goliath Growth Fund D $22,195 Various US Government securities Present market value $19,850 $45,455 $22,195 n/a n/a n/a Sch. 3, Assets: Unlisted securities, ownership interest in private corporations Face value (bonds) Percent of or # of shares Description of security ownership Current value Non-salary income rec'd last year Basis for valuation Sch. 4, Assets: Notes receivable Name of debtor and relationship to applicant Amount owing Description of nature of debt Age of debt Description of collateral held When is payment expected? Annualized payments Annual income, net of expenses, before debt service Sch. 5, Assets and liabilities: Residential real estate and mortgages payable Description of property and Current market Balance of related ownership % value debt Lienholder Years to maturity Residence, 25 Colby Circle $675,000 $479,270 Omega Bank Rental condo: 18 Falling Leaf Lane $250,000 $182,293 Omega Bank 25 23 $46,140 n/a $24,348 $24,000 Sch. 6, Assets and liabilities: Non-residential real estate and mortgages payable Description of property and Current market Balance of related ownership % value debt Lienholder Years to maturity Annualized payments Annual income, net of expenses, before debt service PERSONAL FINANCIAL STATEMENT, continued Andrew Chan, MD SUPPLEMENTARY SCHEDULES 7-13 (Attach separate sheets if necessary) Sch. 7, Liabilities: Autos and auto loans vehicle (year, Current market Balance of related model, make) Original cost value debt Mercedes $115,000 $75,000 $69,000 Annualized payments Lienholder $16,992 Chrysler Finance Years to maturity 5.0 Sch. 8, Assets and Income: Other business income (partnership distributions, capital withdrawals, etc.; exclude corporations) Business name and ownership Amount received Future annual percentage Value of your share last year income Type of income Shown in tax return? Form or Schedule: Sch. 9, Assets and Income: Other significant assets and recurring income (trust income, annuities, pensions, etc.) Other asset or Current market Income received Future annual source of income value last year income Type of income Shown in tax return? Form or Schedule: Sch. 10, Liabilities: Short-term notes payable to banks and others Name of lender Outstanding Maturity date Collateral Purpose, comments Sch. 11, Liabilities: Margin debt Name of lender Original amount Present balance Rate Payment terms Maturity Collateral Sch. 12, Liabilities: Other loans and obligations Name of lender Original amount Present balance Rate Annualized payments Maturity Collateral Sch. 13, Liabilities: Credit cards Name of lender Credit limit Capital One Visa $25,000 Present balance $19,000 Annualized payments $6,840 Rate 9.25% Notes Paid in full monthly? No Omega Performance Corporation. All rights reserved. US-En
