Dynamic Technologies Group Inc - Class A ERILF

RE:RE:RE:RE:RE:Increased LOC with CIBC

[Bobwins]

I would disagree about the line being to increase production capacity.  

Most companies need more financing as they grow.  Investors like increased sales because they think it means more profits.   But like most things in life, profits ain't free.  

Increased sales means more labor, more inventory, more receivables and eventually more profits if the margins are right.  But you have to finance more labor,inventory and receivables.  That typically means a bigger credit line, which turns short term receivables into cash quicker, allowing the company to complete the sales cycle quicker and continue to grow.  

I still maintain that the increased credit line is good.  This is a positive decision by a third party who gets the most updated financial and sales info EIL.v has.  Yes, they already have liens on EIL's short term collateral but there is risk in increasing the credit line and the bank wouldn't do it if the most current financial info didn't support good short term results.  

Collateral doesn't pay back loans, cashflow does.  Hopefully this positive bank decision will be reflected in continuing good financial results over the near and mid term.