HOW CAN I FINANCE MY NEW CONTRACTS WHEN BANKS TAKE SO LONG TO COME BACK TO ME?

THE QUESTION:

Dear Mr. Khugan,

I have a 20-year-old trading business, and recently we are getting a lot of new contracts. However, when I am talking to my bankers, they are taking a very long time to come back to me. Even though my documents and repayment capabilities are excellent. Why are banks taking so long to come back to me with an answer? Is there any other option of financing these new contracts?

Jason L

THE ANSWER:

Hey Jason! Looks like your primary challenge is the lack of a speedy response from your Bank, despite a good repayment capacity. Again, we have been seeing this trend from early this year from most Financial Institutions. For this I need to break your answers into 2 parts. 1) Please advise what is the possible problem:

1.?? BANK PROCEDURES – Due to the previous NPL’s, most banks have tightened their procedures to further assess Risk Assessments and Credit Checks. Though it’s an internal system, it unfortunately affects clients like you who are in the waiting queue.

?2.?? RISK SCRUTINY – Though your repayment capacity and documents are good, your business may be at the newly viewed excluded industry by the bank based on the Risk factors associated with the specific industry.

??3.?? BANK CONSTRAINTS – Financial Institutions today are facing a high volume of applications, with limited risk department personnel. Therefore, processing time for applications have become significantly longer.

Now to answer the 2nd part to your question. 2) What are my options of financing these New Contracts:

?1.?? EXPLORE OTHER FINANCIAL LENDERS – Consider other Financial Institutions or B2B or P2P Platform options. In many cases, they may serve to finance your contracts faster and more efficiently.

?2.?? TRADE FINANCING OPTIONS – Based on the type of contracts that you have confirmed, you can always look at Trade Financing Options.

?3.?? REVOLVING CREDIT FACILITIES – These facilities allow you to finance your contracts more efficiently whilst paying a more reasonable interest.

(NOTE: If you need any further Help on the above 3 options, please feel free to? PM me directly)

?Well Jason! I hope I have managed to answer your question well enough. I hope that you have negotiated with your existing bank and highlighted the time frame that you need, if not that would be another option for you to look into.

If you have any further questions please do not hesitate to email /WhatsApp me.

Best Regards Always,

S.Khugan