SINGAPORE EXPATS FORUM
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Discuss your views about Singapore business & economy, current policies & issues, starting a business in Singapore.
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WertheL wrote:Currently facing issues with cashflows and have the intention to take up a loan. I have some machinery & vehicles that can be collateralize. How are banks going to estimate their value?
IF you can find a bank willing to take used equipment as collateral, I doubt they would loan you more than 50 percent of the used market value at the end of the loan term. They would value equipment in this way to both cover themselves in the event of market fluctuations and to cover the costs of having to repossess, then sell the equipment in the event of a default by you.
At the bottom of it all will be the quality and salability of the equipment. Late model vehicles are more likely to attract a loan. Commonly used equipment as opposed to specialty equipment with a limited market more likely to attract a loan.
Additionally, without considering loan sharks, there are high risk lenders, other than banks, who might finance you, at exorbitant interest rates, of course.
As an alternative, have you considered asking for relief (temporary or permanent) from your debtors in order to conserve cash? A lot of debtors will go along with reduced balances once they realize that the alternative is for you to go out of business, leaving them with nothing.
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