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Business loan/overdraft

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  1. #1

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    Business loan/overdraft

    I'm looking for any information on business loan/overdraft facilities. We have tried HSBC and they seem to only be interested if either individual shareholders stand guarantee or if we can secure against property (i.e. if we own our office). Neither of those is true for us, however we would be happy to secure against our receivables. Anybody tried this and got any suggestions for non-HSBC options?

    Basically, we are mostly interested in something like a line of credit that could be drawn as required, not a need to have a big loan now.


  2. #2

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    Rather difficult to get a loan - like you discovered, banks are open to two options (third one which was offered was "keep a fixed deposit" and we'll loan you that amount when you need...).

    Might want to look at the SME loan guarantee scheme - but it is going to need a lot of paper work and frustration. Have heard that DBS is a bit more friendly to deal with. (Not exactly a raditional recolving credit line)

    https://www.dbs.com.hk/sme/financing...loan-guarantee


  3. #3

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    Thanks Shri. I tried the SME scheme when we first set up and found it to be non-existent (that is, when you actually try to get something, nothing happens). Let me take another look. DBS is an option. We chose DBS for our Singapore companies banking and it's been (mostly) fine. We could possibly port over the whole HK company if necessary, although it would be painful!

    EDIT - looking at that, it's for a fixed loan. We really want an overdraft /revolving credit facility rather than a fixed loan....


  4. #4

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    Don't the banks offer overdraft and some ridiculous rates and fees anyways?

    Why not just get a loan and inject some cash into your company. You could put it into a 3-6 month time deposit and pay the early termination fees if needed. If you put it into a RMB time deposit you'd likely earn money overall, that is until you use it.


  5. #5

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    TB-- where's your advice? Non existent...

    civil_servant likes this.

  6. #6
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    Didn't understand what MandM! was saying, but goes on bashing.

  7. #7

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    Rarely you see SME loans as banks are not in the business of taking those risks.
    Since you have an operation in Singapore, why don't you try to see if you can get it in Singapore. Over there i think EDB or some other ministries/stat-board do team up with banks to fund the SMEs and majority of the risk is taken up by the government.

    As to the type of credit, not sure if they are open to the revolving credit versus an outright term loan. If i am a bank, facing a SME client that is entirely unpredictable in terms of business flows/assets, why would I want to have a revolver open up and client will likely draw only when they are going out of business in a few months...

    TheBrit and shri like this.

  8. #8

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    Quote Originally Posted by civil_servant:
    Didn't understand what MandM! was saying, but goes on bashing.
    TB is right though.

    But at least you all help keep the thread near the top in case anyone has any good ideas. I didn't expect there to be any, but my business partner "just assumes" these things are available because they were in the USA. So I thought I better check. Again.

  9. #9

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    Quote Originally Posted by freeier:
    Rarely you see SME loans as banks are not in the business of taking those risks.
    Since you have an operation in Singapore, why don't you try to see if you can get it in Singapore. Over there i think EDB or some other ministries/stat-board do team up with banks to fund the SMEs and majority of the risk is taken up by the government.

    As to the type of credit, not sure if they are open to the revolving credit versus an outright term loan. If i am a bank, facing a SME client that is entirely unpredictable in terms of business flows/assets, why would I want to have a revolver open up and client will likely draw only when they are going out of business in a few months...
    Thanks. Our Singapore business is very new and I thought it would be harder there, but perhaps you are right. Worth looking anyway.

  10. #10

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    Definitely try Singapore. They are a lot friendlier to SME's. Maybe a bit off topic and not directly relevant for you, but they have something called a PIC scheme (productivity and Innovation credit scheme) that I have been abusing for years. All my regional IT projects go through Singapore subsidiary because SG government pays for them all. I just classify the project as "IT automation" or "R&D" and then the government is happy to pay for it.


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