I don’t understand how management could have made announcements...

I don’t understand how management could have made announcements to the effect that this $1m revolving line of credit was pretty much a done deal, without even having the conversation with the bank about whether or not they meet the lending requirements.

This is not a complex part of the loan process. If you or I were to seek finance from a bank, the first two questions asked are firstly “what’s your income?” and secondly “how secure and reliable is that income?”

There are only two possible scenarios here, either:

1) Management are clueless on finance, or:

2) Management deliberately misled the market.