An application for a small business loan by a group of

"A jazz music club in Monroe would be a tremendously profitable enterprise. Currently, the
nearest jazz club is 65 miles away; thus, our proposed club, the C Note, would have the local
market all to itself. Plus, jazz is extremely popular in Monroe: over 100,000 people attended
Monroe's jazz festival last summer, several well-known jazz musicians live in Monroe, and the
highest-rated radio program in Monroe is 'Jazz Nightly,' which airs every weeknight. Finally, a
nationwide study indicates that the typical jazz fan spends close to $1,000 per year on jazz
entertainment. It is clear that the C Note cannot help but make money."

This loan applicant claims that a jazz club in Monroe would be a profitable venture. To
support this claim the applicant points out that Monroe has no other jazz clubs. He also cites
various other evidence that jazz is popular among Monroe residents. Careful examination of
this supporting evidence, however, reveals that it lends little credible support to the applicant's claim.

First of all, if the demand for a live jazz club in Monroe were as great as the applicant claims,
it seems that Monroe would already have one or more such clubs. The fact that the closest
jazz club is 65 miles away suggests a lack of interest among Monroe residents in a local jazz
club. Since the applicant has not adequately responded to this concem, his claim that the
proposed club would be profitable is untenable.

The popularity of Monroe's annual jazz festival and of its nightly jazz radio show might
appear to lend support to the applicant's claim. However, it is entirely possible that the vast
majority of festival attendees are out-of-town visitors. Moreover, the author provides no
evidence that radio listeners would be interested in going out to hear live jazz. For that matter,
the radio program might actually pose competition for the C-Note club, especially considering
that the program airs during the evening.

Nor does the mere fact that several weU-known jazz musicians live in Monroe lend
significant support to the applicant's claim. It is entirely possible that these musicians perform
elsewhere, perhaps at the club located 65 miles away. This would go a long way toward
explaining why Monroe does not currently have a jazz club, and it would weaken the
applicant's assertion that the C-Note would be profitable.

Finally, the nationwide study showing that the average jazz fan spends $1,000 each year on
jazz entertainment would lend support to the applicant's claim only if Monroe residents typify
jazz fans nationwide. However, the applicant provides no credible evidence that this is the
case.

In conclusion, the loan applicant's argument is not persuasive. To bolster it he must provide
clearer evidence that Monroe residents would patronize the C-Note on a regular basis. Such

evidence might include the following: statistics showing that a significant number of Monroe
residents attend the jazz festival each year; a survey showing that fans of Monroe's jazz radio
program would go out to hear live jazz if they had the chance; and assurances from
well-known local jazz musicians that they would play at the C-Note if given the opportunity.