Enquiry about a Firm Negotiating a Loan

PAK. TRADING CO.

Lyton Road,

Lahore.

21^st October, 19………..

M/s Sheikh Industries,

G. T. Road,

Gujranwala.

Dear Sirs,

Messrs Tanvir & Co., having given me the name of your firm, with permission to ask you for particulars as to their financial position, I should be greatly obliged if you would inform me, confidentially whether you consider their business is being carried on in a satisfactory manner, and whether you think there is a probability that their undertaking will prove an eventual success. These gentlemen negotiated a loan of Rs. 70,000/- with me some two years ago, and have paid the interest promptly as it became due, but, owing to various expenses connected with the extension of their premises, they have now requested me to renew the loan for another three years, at the same rate of interest, viz.5 per cent per annum, and to lend them a further Rs. 30,000 on the same terms.

I understand that you had a similar transaction with them, and, moreover, have known the two partners personally for many years, and you will, therefore, be in a position to tell me whether the firm is warranted in negotiating a loan of Rs.100000/-, taking into consideration the possibilities of their trade.

They are, apparently, doing a very good business, and with very little competition in their district, but they seem to be endeavoring to accomplish more than can reasonably be expected of their business in its present limited conditions.

Of course it is difficult to judge of the possibilities of such a business, and I must necessarily base my conclusions upon results up to the present.

Any information with which you may favour me will be much appreciated.

Yours faithfully,

Pak, Trading Co.

Reply to above.

25^th October, 19…………

Dear Sirs,

In reply to your inquiry about Tanvir & Co., we can state that we have every confidence in the uprightness of this firm, and feel assured that you can rely upon their business acumen in any engagements to which they may commit themselves. Our Mr.……… has known both partners from their youth, and the transaction to which you refer was a loan by Mr. …….. to assist them in the purchase of their premises. They have from the outset been somewhat hampered by want of capital, but the business has proved a good venture, and, moreover, with two energetic and pushing young men at the heaf of it, there is every possibility and probability that it will ripen into a very good concern, as there is plenty of scope and scarcely any competition locally.