<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published March 10, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>EMERGING ENTERPRISE
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>How to get the bank loan that your company needs
By JESSICA YEO
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>QUANTUM Consultancy Services (QCS), which provides IT solutions and services, has always found it easy to obtain bank loans. Just a few weeks back, QCS had its bridging loan application approved within three days.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>'Some bosses don't know about accounts, so they rely on accountants. But the accountants also pua tang chui (half full) so they cannot really do a good job on the accounts.'
- Mr Go</TD></TR></TBODY></TABLE>QCS director Go Puay Wee said that an audited financial statement coupled with a healthy net worth is the way to get loans. And he should know, having obtained loans successfully under the Micro Loan, Local Enterprise Finance (LEF) and Bridging Loan programmes.
QCS, which has been using OCBC as its banking partner since its incorporation in 2000, has only had one hiccup so far in its application for loans. This was during the company's early years, when QCS applied for its first loan - the micro loan for small enterprises with less than 10 employees.
Mr Go needed a referral before he could obtain the loan. Fortunately, his father's friend acted as a referee. 'It's very tiny, but I think all banks need that - someone to recommend you to them.'
QCS only applied for the micro loan when it had two years worth of audited financial statements. 'When you start the company, banks will not give you the money,' Mr Go said. 'So for the first two years, our loans were from our parents.'
Otherwise, it has always been smooth sailing for QCS, as seen in his loan under the LEF scheme.
When QCS applied for the loan, it was given $300,000. However, as business expanded, the company needed more money for working capital. Mr Go then approached OCBC for an additional $200,000, and the loan was approved in a short while, after the bank checked through the company's financial statements. So far, the company's first two loans have been crucial to helping QCS grow.
The company needs working capital to pay suppliers upfront as customers usually pay after the 30-day deadline. 'Customers don't pay after 30 days. They pay on the 60th day, or sometimes 45th,' Mr Go said.
'But once its Day 30 for the supplier, and you are new and have not paid them, you will not get any more goods from them.'
With the loans helping QCS pay suppliers promptly, the company managed to secure suppliers when starting up, and now sees a growth of about 20-30 per cent compounded in revenue per year.
Regarding his most recent loan under the Bridging Loan programme, Mr Go said that he found it even easier to obtain despite the credit crisis as the government guarantees 80 per cent of the loan amount.
However, he still believes in the importance of an audited financial statement, and healthy net worth. 'If the company's net worth is up to a level where banks are comfortable, of course they will lend you,' Mr Go said. He added: 'If your net worth is only $50,000, how can they loan you $300,000?'
Mr Go emphasised that companies should do an audit, and provide audited financial reports on a timely basis. He said that his background as an auditor for three years at Ernst & Young helped him to realise the importance of audits, and that accounts are done correctly. 'Some bosses don't know about accounts, so they rely on accountants,' Mr Go said. 'But the accountants also pua tang chui (half full in Hokkien) so they cannot really do a good job on the accounts,' he added.
The company's application for the bridging loan is to help with its expansion into Chengdu in China, where it is striving to increase the turnover. 'We can apply for up to $5 million, but currently we don't need so much funds, because we still have the $500,000 banking facility from the LEF scheme.'
Mr Go said that he does not want to expand too fast in the crisis, so starting off with a small amount is fine. He added that should he need more funds, OCBC said that he could apply again.
Regarding the loan application process, Mr Go said that the bank's relationship manager (RM) is very important. Every time he had a question, the RM would go to his office to explain personally.
Mr Go added that a lot of things can now be done over the Internet, making banking very convenient. He also said that the application process for bank loans was simple.
He said that audited financial statements for two years need to be shown to obtain loans. The RM will then help the company fill up the application form.
Subsequently, the directors of the company, who need to have a good credit standing, must sign as guarantors.
Mr Go added that any question the bank posed needed to be answered quickly to avoid any delay. 'Whatever the bank wants, give it to them fast.'
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>EMERGING ENTERPRISE
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>How to get the bank loan that your company needs
By JESSICA YEO
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>QUANTUM Consultancy Services (QCS), which provides IT solutions and services, has always found it easy to obtain bank loans. Just a few weeks back, QCS had its bridging loan application approved within three days.<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>'Some bosses don't know about accounts, so they rely on accountants. But the accountants also pua tang chui (half full) so they cannot really do a good job on the accounts.'- Mr Go</TD></TR></TBODY></TABLE>QCS director Go Puay Wee said that an audited financial statement coupled with a healthy net worth is the way to get loans. And he should know, having obtained loans successfully under the Micro Loan, Local Enterprise Finance (LEF) and Bridging Loan programmes.
QCS, which has been using OCBC as its banking partner since its incorporation in 2000, has only had one hiccup so far in its application for loans. This was during the company's early years, when QCS applied for its first loan - the micro loan for small enterprises with less than 10 employees.
Mr Go needed a referral before he could obtain the loan. Fortunately, his father's friend acted as a referee. 'It's very tiny, but I think all banks need that - someone to recommend you to them.'
QCS only applied for the micro loan when it had two years worth of audited financial statements. 'When you start the company, banks will not give you the money,' Mr Go said. 'So for the first two years, our loans were from our parents.'
Otherwise, it has always been smooth sailing for QCS, as seen in his loan under the LEF scheme.
When QCS applied for the loan, it was given $300,000. However, as business expanded, the company needed more money for working capital. Mr Go then approached OCBC for an additional $200,000, and the loan was approved in a short while, after the bank checked through the company's financial statements. So far, the company's first two loans have been crucial to helping QCS grow.
The company needs working capital to pay suppliers upfront as customers usually pay after the 30-day deadline. 'Customers don't pay after 30 days. They pay on the 60th day, or sometimes 45th,' Mr Go said.
'But once its Day 30 for the supplier, and you are new and have not paid them, you will not get any more goods from them.'
With the loans helping QCS pay suppliers promptly, the company managed to secure suppliers when starting up, and now sees a growth of about 20-30 per cent compounded in revenue per year.
Regarding his most recent loan under the Bridging Loan programme, Mr Go said that he found it even easier to obtain despite the credit crisis as the government guarantees 80 per cent of the loan amount.
However, he still believes in the importance of an audited financial statement, and healthy net worth. 'If the company's net worth is up to a level where banks are comfortable, of course they will lend you,' Mr Go said. He added: 'If your net worth is only $50,000, how can they loan you $300,000?'
Mr Go emphasised that companies should do an audit, and provide audited financial reports on a timely basis. He said that his background as an auditor for three years at Ernst & Young helped him to realise the importance of audits, and that accounts are done correctly. 'Some bosses don't know about accounts, so they rely on accountants,' Mr Go said. 'But the accountants also pua tang chui (half full in Hokkien) so they cannot really do a good job on the accounts,' he added.
The company's application for the bridging loan is to help with its expansion into Chengdu in China, where it is striving to increase the turnover. 'We can apply for up to $5 million, but currently we don't need so much funds, because we still have the $500,000 banking facility from the LEF scheme.'
Mr Go said that he does not want to expand too fast in the crisis, so starting off with a small amount is fine. He added that should he need more funds, OCBC said that he could apply again.
Regarding the loan application process, Mr Go said that the bank's relationship manager (RM) is very important. Every time he had a question, the RM would go to his office to explain personally.
Mr Go added that a lot of things can now be done over the Internet, making banking very convenient. He also said that the application process for bank loans was simple.
He said that audited financial statements for two years need to be shown to obtain loans. The RM will then help the company fill up the application form.
Subsequently, the directors of the company, who need to have a good credit standing, must sign as guarantors.
Mr Go added that any question the bank posed needed to be answered quickly to avoid any delay. 'Whatever the bank wants, give it to them fast.'
</TD></TR></TBODY></TABLE>
