The Chinese businessmen of small and medium-sized enterprises in Malaysia have a kind of mentality of “seeing not getting” for the financing and fund matching set by the government. Even if the government or commercial banks have introduced financing and fund support, what are the benefits? For those who do not meet the requirements or are not prepared to apply for loan homework in advance, these preferential packages are just empty talks for them.

[ Coordinator Cheng Zhibin ] Generally speaking, the Chinese businessmen of small and medium-sized enterprises in Malaysia have a kind of mentality of “seeing not getting” for the financing and fund matching set by the government. For some of the more extreme Chinese businessmen, it is described that these government financing and fund matching are for indigenous people, and not for indigenous people.

In fact, the government does indeed set some quotas (Quota) for non-indigenous people. For me, even if the government or commercial banks have introduced financing and fund support, how attractive and preferential, for some merchants who do not meet the requirements or are not ready to apply for loan work in advance, these preferential packages, For them, it is just empty talk.

Therefore, let me tell the SMEs merchants to apply for government or commercial bank financing, what conditions do they want to see the business? Let me explain to you one by one now.  

5C loan conditions

(1) Capacity

Banks or financial institutions will estimate how the companies they want to borrow are going to pay back the loans they have given. Banks or financial institutions will consider the company's existing liquidity and the length of the loan (such as loans for up to 3 years, 5 years or 7 years) to apply for loans. In addition, they will use the company's past payment records as a standard to predict whether the company is capable of paying future interest and principal. Some banks or financial institutions will also consider whether the company has other sources of income in order to further strengthen the company's ability to repay.

(2) Capital

Banks or financial institutions generally believe that the directors themselves have invested a certain amount in their own companies (for example, shareholders inject 100,000 funds), and when the company wants to expand, they borrow from banks or financial institutions. Many merchants mistakenly believe that they can borrow 100% from banks or financial institutions without paying a penny. In fact, the greater the investment of the directors themselves, the greater the confidence of the directors in their own companies. Similarly, the confidence of banks or financial institutions in the company is greatly enhanced, and the success rate of loans is also increased.

(3) Condition

Banks or financial institutions will consider whether the company can continue to operate in the current economic downturn, or whether the company will face the fierce struggle of its peers and affect the company's performance. Assess whether the company is affected by external factors that affect the company's business.

(4) Character

The bank or financial institution will assess the integrity of the company or director. Banks or financial institutions will believe that if the integrity of the company or director is not good, it will affect the company's ability to repay the loan. In general, banks or financial institutions use the Central Credit Reference Information System (CCRIS) and Credit Information Services Limited (CTOS) to measure the integrity of a company or director.

Editor's note: CCRIS is a standard that allows banks to refer to the credit rating of arrears. CTOS is a major credit information system widely used to retrieve personal or company credit information. The difference between the two is that CCRIS is under the jurisdiction of the National Bank, while CTOS is a Malaysian private limited company that has been in business for more than 20 years. It is responsible for collecting and collating credit information from individuals and companies published by public resources.

(5) Collateral

Many businesses mistakenly believe that they can get loans from banks or financial institutions as long as they have a mortgage. Merchants believe that banks or financial institutions should lend to them as long as banks or financial institutions auction off mortgages without facing losses. In fact, banks or financial institutions do not want to auction the company's mortgages, they just want to earn interest from the loan.

In general, as long as you meet the above five C standards, getting a bank loan is definitely not a difficult task.

Cheng Zhibin : With more than 15 years of experience in corporate financial planning and business consulting, he is more adept at 
credit analysis and financing in government finance, commerce and corporate.

Source: dreamfactory.media