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Getting a Credit Line for a Private Limited Company

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  1. #1

    Join Date
    Jun 2012
    Posts
    35

    Getting a Credit Line for a Private Limited Company

    I was wondering, if someone could share their advice/experiences on what sort of factors large banks look at, when deciding whether or not to offer a credit line to a private limited company. Initially, we were told they would usually ask for the last 2-3 years audited statements. What sort of a chance does a company have to get a limit - with 1 years audited statements + 18months account history with the bank.

    Also, how do they usually decide the amount of the limit?

    Thanks

    Last edited by gz_expat; 03-04-2013 at 12:10 PM.

  2. #2

    Join Date
    Jan 2008
    Posts
    1,966

    Security:

    It is difficult to get any banking facility without security. If you cannot offer property, then cash will be required. Also depends on what kind of facilities you are looking for.
    Overdraft, D A are very difficult.


    Quote Originally Posted by gz_expat:
    I was wondering, if someone could share their advice/experiences on what sort of factors large banks look at, when deciding whether to not to offer a credit line to a private limited company. Initially, we were told they would usually asked for the last 2-3 years audited statements. What sort of a chance does a company have to get a limit - with 1 years audited statements + 18months account history with the bank.

    Also, how do they usually decide the amount of the limit?

    Thanks
    Last edited by Oldtimer; 03-04-2013 at 12:10 PM.
    JAherbert likes this.

  3. #3

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934
    Quote Originally Posted by gz_expat:
    I was wondering, if someone could share their advice/experiences on what sort of factors large banks look at, when deciding whether or not to offer a credit line to a private limited company. Initially, we were told they would usually ask for the last 2-3 years audited statements. What sort of a chance does a company have to get a limit - with 1 years audited statements + 18months account history with the bank.

    Also, how do they usually decide the amount of the limit?

    Thanks
    They look at shareholder guarantees and NOTHING else. We could not get a loan for our small business without putting up guarantees (which I was not prepared to do - otherwise why on earth would I have wanted a loan if I already had the money?). We even tried to invoke the SME Government Loan Guarantee Scheme - and they STILL wanted shareholder guarantees. They said the Government Guarantee was to guarantee if the shareholders failed to pay up!

    It's f'ing pathetic.

    (Sorry for the rant - not a good subject for me).
    Simonli and JAherbert like this.

  4. #4

    Join Date
    Dec 2012
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    WanChai
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    Totally agree with MovingIn07. This is exactly the current situation!!


  5. #5

    Join Date
    Jun 2012
    Posts
    35

    Thanks for the responses guys. But if "collateral" was the only criteria, why do they even bother to ask for audited accounting statements, etc?

    What happened to factors like studying the companys current ration, turnover (to determine the amnt. of credit that can be offered). I am looking at both from a point of view of "working capital credit line" as well as "loans".

    On another note, do HK Banks accept Chinese properties as collateral (especially those in Guangdong)?


  6. #6

    Join Date
    Jan 2008
    Posts
    1,966

    HSBC & BEA

    gz_expat
    QUOTE: "On another note, do HK Banks accept Chinese properties as collateral (especially those in Guangdong)?[/QUOTE]
    HSBC & BEA provide Mortgage for China property. So I presume they may consider financing banking facilities with China property as security.


  7. #7

    Join Date
    May 2010
    Posts
    4,713
    Quote Originally Posted by gz_expat:
    Thanks for the responses guys. But if "collateral" was the only criteria, why do they even bother to ask for audited accounting statements, etc?

    What happened to factors like studying the companys current ration, turnover (to determine the amnt. of credit that can be offered). I am looking at both from a point of view of "working capital credit line" as well as "loans".

    On another note, do HK Banks accept Chinese properties as collateral (especially those in Guangdong)?
    The banks are required to make sure a business loan is for business purposes and not for investment/gambling. Payrolls comes in handy, and so does a rental contract.

    Chinese real estate can be used as collaterals if it is owned by the Hong Kong company.