Hello Mr Tan
I am running a retail business in a shopping centre? In recent months, I am facing some financial issue to running the retail operation. I tried to ask the bank for a SME loan of $X. The bank rejected my application as I am low in funds with the bank. I am confused by the rejection, as I needed the loan because I am low in funds. Why is it that nobody can help? I am willing to pay interest to the bank but they refuse me. Please advise me what to do.
REPLY
This problem is outside of my expertise. I do not know how I can help. Perhaps, if the business is doing poorly, it is better to close it down, before it incurs further losses.
If the business has the prospect of being profitable, you should be able to interest investors or to convince the bank to provide a loan.
That is the problem with financial institutions, insurers included. They want to lend you an umbrella with holes when it is sunny, then abruptly take back the umbrella when it starts to rain. Live a simple life, why bother with them in the first place. Can be life shortening. Whenever someone approaches me to sign up a credit card or to take a loan, I gave them the umbrella with holes theory.
ReplyDeleteIt is important that when you apply for a loan, you provide the proper documentation. This includes financial statments from the past 3-5 years, as well as how you will use this money and your ability to pay it back. Provide a financial projection of the next 5 years to illustrate this.
ReplyDeleteBest of luck!
You can see going into business is a risky investment. Many retirees think otherwise. They go into business to keep themselves busy.They think it is only way to while away the golden years.If not careful they will waste their golden years.
ReplyDeleteWhen retirees go into business all they want is a salary for themselves. They never think of profit. They think the salary is profit.And very often, unknown to them, they might be running at a loss even though they draw a salary They forgot the salary they draw is an expense of the company. This is how they understand business. Many lost their CPF money, their retirement fund. It is a mistaken notion that small business is less risky.Losses can run up to a lot if you don't keep track and some hang on hoping for better time.
A small business and big one are no difference, they are run in the same way.The sole proprietor is the ceo, he is the only shareholder,he bears all the risk, he may be also the employee who multitasks a few employees' role.
You retirees, before you jump into a business with your retirement fund, cpf or hard earned money get an adviser( not an insurance agent) to help to draw up a business plan. Like a personal financial plan it has the same steps,.The plan helps you to see where your business is going,the necessary means you need to take, helps you to see trouble if you should encounter, helps avoid the bumps if they appear.These are risk reduction measures. You may think a hawker stall need not to have a 'complicated' plan . The fact is it is simple.
Zhumeng:o)