Following are the steps followed by finance manager in procurement of a loan for working capital. Arrange them in a proper sequence.

A. Co-ordinating the verification of assets.

B. Submission of loan proposal.

C. Estimation of Working Capital Requirements.

D. Creation of charge on Assets.

E. Document Execution.

Choose the correct answer from the options given below:

The correct answer is C, B, A, E, D.

Key Points The correct sequence is:

Estimation of Working Capital Requirements.
C. Estimation of Working Capital Requirements is the initial step where the finance manager assesses the company's working capital needs by analyzing the cash flow, inventory, accounts receivable, and accounts payable.

Submission of loan proposal.
B. Submission of loan proposal is the next step, where the finance manager prepares and submits a formal proposal to the lending institution. The proposal outlines the loan amount, purpose, repayment terms, interest rates, and other relevant information.

Co-ordinating the verification of assets.
A. Co-ordinating the verification of assets involves assessing the value and ownership of assets that can be used as collateral for the loan. This step may involve coordinating with appraisers or other professionals to evaluate the assets.

Document execution.
E. Document execution is the final step, where the finance manager and authorized representatives of the company and the lending institution sign the loan agreement and related documents. This step formalizes the loan arrangement and establishes the contractual obligations and terms between the parties involved.

Creation of charge on assets.
D. Creation of charge on assets refers to establishing a legal claim or lien on specific assets of the company. This provides security to the lender in case of default. This step involves the creation of relevant legal documentation and registration of the charge.