11th Sept 2018
Fundings are proven the lifeline of a company and without it, the whole thing will not be functional. Hence, this write up is to share on what banks really wants from a you before approving a loan for your business and this are the five points that bankers will see how good are you:
1. Cash flow: This is the most convincing report card for business owners as a well-documented cash flow will be able to show the bank that the business is able to meet its commitment. Generally, Malaysian bankers will used to have reference on the cash flow statement, balance sheet and profit & loss for at least 3 years; and do not forget that, you will need to attach with the tax receipts too!
2. Collateral: If you are a newbie in the business, that most likely your banker will not lend you anything without collateral as your business is not having any history for make conclusion. Therefore, in this case the bank will request a collateral as a pre-cautious if case anythings goes wrong. At times, the banks will look into your machineries, home, properties, stocks and even equity.
3. Co-Guarantor: In order to have extra protections, banks will request a co-guarantor who is having creditworthiness in order to gain extra "trust".
4. Marketing plans: The bankers would like to know how you manage the Strength, weakness, opportunities & threat (SWOT). Besides that, the bankers will see again are your products if they can withstood competition, price wars and popularity. Afterall, hot selling of products means the company is able to meet the commitment of paying bank to the bank.
5. Management: Bankers will track the borrower's record, history, & financial strength. Do not get surprised if the bank rejected your loans application if you are having high credit card's debt, home loan debt, personal loans and bla bla debt. Clean and make sure you are in good condition before making the loan applications.
Do not be upset if the bank rejected your loans application as the nature of business is to be conservative and to protect the bank's interest and not yours!