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Our current revolving line of credit, which is a committed facility of $40,000,000 is coming...

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Finance

Our current revolving line of credit, which is a committed facility of $40,000,000 is coming due. We are currently using $23,000,000 of the total committed amount. We have obtained three proposals from different banks for a new line of credit. Please recommend which line of credit proposal we should contract with by taking into consideration the following questions: What level of committed line of credit do we need, and consider how we have been managing working capital in the past and potential growth in revenues that translates into working capital investment? You need to address the considerations in managing the cash conversion cycle better. Should we keep existing cash on the balance sheet for future mergers and acquisitions or should we consider using some of these funds for supporting our short-term line of credit needs? How do each of the bank proposals support our working capital needs in relation to the amount of the committed line of credit and the effective annual cost of each line and terms for each proposal?

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