This case is based on an actual loan request, where only the names and dates have been changed. The purpose of the case is to help you get into the heads of entrepreneurs and bankers when they come in to the process of negotiating a loan. You will need to go beyond what is presented in Chapter 12 regarding the terms explained in negotiating a bank loan. But you will be challenged to learn the process all the better. So, consider the following questions:
1. Who benefits, directly and indirectly, when bank loans are made?

2. What are the different types of loans a borrower can acquire from a bank, and what is the purpose for each type? What kind of loan is Rose requesting?

3. When negotiating a loan, what is important to the borrower? To the banker?

4. Briefly describe each of the bank’s loan covenants and why the bank is including them.

5. Which terms do you think would bother Rose the most?

6. Why might the bank be willing to negotiate on the terms it is suggesting?