Internet based cash flow financing
                 -
      Overview of how it works




                         -1-
Presentation Flow


  Overview of Cash Flow Financing
  Effective New Business Origination
  Credit Vetting Process
  Cust...
Overview of Cash Flow Financing




                      -3-
Cash Flow Financing Process




                              -4-
How it works? - A Continuous Process

      Loan                 Loan                      Loan Risk                    Lo...
Features of Cash Flow Financing
It is a Revolving Credit Facility
   Line size depends on the amount of eligible outstandi...
Effective New Business Origination




                       -7-
Target Market
      Top 5% SME Market
      Sought by all Banks, “Best” Clients



                                       ...
Potential Cash Flow Lending Market

                                                   High probability industry
Raw Mater...
Differentiation Factors for Cash Flow Lending

-   Convenience via internet

-   Quick approval

-   No security / collate...
Summary of SMEloan Asset Portfolio by Source



      Business
     Development                          Mass Media
 -   D...
Comparison of Different Business Acquisition Options
                                                Advantages           ...
Analysis of resources requirement for telemarketing programs

           Functions of how many new deals you plan to close...
New Business Acquisition Flow

                               Typical new business acquisition flow


               Pre-q...
Distribution Effectiveness Matrix
                                                              Reduce costs of
          ...
Successful Telemarketing Strategies

•   Availability of targeted data base      •   Industries include printing paper, fo...
What are the customer’s Concerns?



                     Business                     Pricing too high?
                 ...
Addressing Concerns
                      Concerns                                                          How to address...
Credit Vetting Process




                 - 19 -
Approval Process Overview


                     Initial Approval -             Loan size and
  Application
              ...
Credit Vetting - Documents Required

 a. Identity of applicant            d. External Obligation
    - Business Registrati...
In Principal Approval
• The principal is to have a “snap shot” view of the financial position of
  the borrower for the la...
Credit Vetting Process

a. Identity of applicant                           b. Identity of owners
    - Company search /   ...
Loan Approval - Snapshot of Cash Flow/Business for Past Six Months
                                          Account Recei...
Highlights on Credit Vetting Process

•   Recent performance and cash flow, not historical performance

•   Standard proce...
Customer Servicing Process




                   - 26 -
Post-Approval Process Overview

•   Customer Services
•   Web Training
•   Cash Management




                           ...
Customer Services

•       Bilingual Help Desk and Customer Services
    –     Account Inquiry
    –     Advance requests ...
Sample of Monthly Call Tracking Reports




                                     - 29 -
Sample of Monthly Call Tracking Reports




                                     - 30 -
Web Training
•   Setup and Operation
     –   2 hours per training at customer’s site, able to handle 20-30 customers
    ...
Cash Management Process


                                             Your bank
                                       Sc...
Post-Approval Process Highlights

•   Scalable operation
•   Multi-channel support – centralize customer’s inquiry
•   Eff...
Risk Management Process




                 - 34 -
Risk Management Methodology

•   Proactive account monitoring based on current data instead of
    outdated financial stat...
Risk Management Process




Identification   Analysis   Strategy     Action




                                - 36 -
Identification


                          Engage            Determine
    Identification                                 ...
Composition of Cash Flow



                                     Amount of
             SME
                              ...
Credit Monitoring
Cash flow/                             Desirable clients
Sales
                                         ...
Operating Problems
1) No Cash – The borrower has not deposited cash collections for 14
   days.
2) No Sales – The borrower...
Unusual Reporting Activities
1) Unusual activities: Material Dilution – A borrower’s accounts
   receivable have a large a...
Engage Customers


                        Engage              Determine
    Identification                               ...
Determine Viability


                         Engage              Determine
    Identification                           ...
Action



    Identification          Analysis          Strategy               Action


•    Negotiate with SME borrowers ...
Results


•   Early warning capability

•   Improved asset quality

•   Reduced loan servicing cost




                  ...
Summary

• Preferred analytical alternative to traditional risk methodology

• Standard criteria ensures institutional con...
Loan Recovery Process




                - 47 -
Crystallization
We crystallize means we now convert a floating charge on accounts receivable
into fixed charge and amount ...
Why would You Crystallize
Essentially the last resort as it could have negative impact on SME borrowers’
on-going business...
Common Mistakes
We move too slowly and guarantors skip town or companies are closed
down overnight.

Must always focus on ...
Things to Remember in Crystallization
Always be courteous as debtors do not have contractual relationship with
the bank

T...
Common Responses of Debtors in Crystallization
“There is no balance outstanding”
•   It is positive as the debtor acknowle...
Common Responses of Debtors in Crystallization
“I have paid them recently”
•   Not entirely surprising as SME borrowers co...
Common Responses of Debtors in Crystallization
“I have given him deposits”
•   It is likely for some industries to have de...
Using cash flow lending to enhance competitive edge
                   GOAL: Become MAIN OPERATING bank of SMEs
          ...
How to win business by offering SMEloan?
 Industry                           Printing
 Annual turnover         $      40,0...
How to win business by offering SMEloan?
 Industry               Business form and paper tradiing
 Annual turnover       $...
Thank You




            - 58 -
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Internet Based Cash Flow Lending

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Overview of Cash Flow Financing, Effective New Business Origination, Credit Vetting Process, Customer Servicing Process, Risk Management Process, Loan Recovery Process

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Internet Based Cash Flow Lending

  1. 1. Internet based cash flow financing - Overview of how it works -1-
  2. 2. Presentation Flow Overview of Cash Flow Financing Effective New Business Origination Credit Vetting Process Customer Servicing Process Risk Management Process Loan Recovery Process -2-
  3. 3. Overview of Cash Flow Financing -3-
  4. 4. Cash Flow Financing Process -4-
  5. 5. How it works? - A Continuous Process Loan Loan Loan Risk Loan Origination Underwriting Management Servicing • Powered by web- • Data obtained • Customer service • Offline or Online based scoring integrated with risk personnel help origination engine monitoring platform SMEs on day to day operating issues • Initial approval result • Company’s sales, within 1 day account receivables • Phone system for is submitted via automating the • Information is Internet and funding process and verified with collection is information ready supporting deposited into your when answering documentation and designated bank customer phone call external credit account checks are run. • Platform monitors Complete document • The exceptions and increases loan received, result based platform picks limits based on credit within 1-5 days up any irregularities quality and and credit risks receivable levels Customer Loan Increase Request -5-
  6. 6. Features of Cash Flow Financing It is a Revolving Credit Facility Line size depends on the amount of eligible outstanding account receivables Loan size range from US$25,000 to US$650,000 Non-Notification basis Secured by a Charge over Receivables All Invoices issued by the SMEs must be submitted Information sent via Internet directly no physical invoice needed Borrow whenever SME borrowers need All Payments from Debtors to be deposited into lending bank’s designated bank account or branch collection box -6-
  7. 7. Effective New Business Origination -7-
  8. 8. Target Market Top 5% SME Market Sought by all Banks, “Best” Clients SMEloan Focus Sales turnover ranges: US$250,000 to US$7 million Middle 85% SME Market Loan size ranges: Primarily Collateral Lending or US$25K to US$650K Factoring, A/R Financing or not Financed by Banks Bottom 10 % SME Market Avoided by all Banks -8-
  9. 9. Potential Cash Flow Lending Market High probability industry Raw Material Suppliers Printing Importer Paper trading Electronic Components Textiles Wholesaler Cash Flow Garment accessories Lending Watch components Market Food distribution and trading Manufacturer Services (I.e. security guards) Plastic and Metal Manufacturing Wholesale distribution Distributor Exporter Companies should be those that sell to local buyers on open account with working capital needs Buyers -9-
  10. 10. Differentiation Factors for Cash Flow Lending - Convenience via internet - Quick approval - No security / collateral required - Flexible in line increase - Non-notification - No fixed repayment term - Reasonable pricing - No selection of individual debtors - 10 -
  11. 11. Summary of SMEloan Asset Portfolio by Source Business Development Mass Media - Debtor database - Advertisement - Direct mailing - Seminar & Exhibition - Telemarketing 19.6% - Commission sales 43.3% 37.1% Referral - CPA firms - Financial consultant - Relationship managers - 11 -
  12. 12. Comparison of Different Business Acquisition Options Advantages Disadvantages Existing 1. Leverage existing resources rapidly 1. Not able to reach out to large number of small companies Relationship team 2. Size of transactions larger 2. Low chance of consistent deal close 3. Continued challenges to pre-established credit box and/or alliances 4. High fixed overhead resulting in high per deal acquisition cost 5. Higher probability for price concession request Commission Sales 1. Low fixed overhead 1. Low chance of consistent deal close 2. Relatively quick start up 2. Frequent challenges to pre-established credit box 3. Low per deal acquisition cost 4. Proactive to target high probability industries Telemarketing Sales 1. Low fixed overhead 1. Not able to support the distribution of wide range of products 2. Relatively quick start up available from the bank supported by field 3. Low per deal acquisition cost sales on closing 4. Consistent chance of deal close with good target data base 5. Proactive to target high probability industries Branch Network 1. Extensive reach to a large group of potential customers 1. Low chance of consistent deal close 2. Extensive training of branch personnel to have effective results 3. Competing with other “easy” to sell products 4. Passive waiting for applicants 5. Frequent challenges to pre-established credit box Mass Media 1. Reach large number of potential borrowers 1. Large number of rejections 2. Expensive and unpredictable per deal acquisition costs 3. Passive waiting for applicants Telemarketing together with field sales presents the most effective business origination solution. Our acquisition experience is for telemarketing supporting 2 field sales closing on average 3 deals per sales person per month at a per deal acquisition costs of US$1,250 per deal (credit limit of US$125,000). - 12 -
  13. 13. Analysis of resources requirement for telemarketing programs Functions of how many new deals you plan to close % of approved applications acceptance 85% 20 % of companies applications approved 20% 24 % of companies submitting complete applications and documents 20% 118 % of companies showing interest 15% 588 Number of contacts needed 3,922 Days of working days a month (including Sat) 24 Analysis Conclusion Average application success ratio 17% Number of contacts per day 163 Number of calls per teleamarketer per day 35 Number of telemarkers needed 5 Initiate contacts - 13 -
  14. 14. New Business Acquisition Flow Typical new business acquisition flow Pre-quality & Execute Initiate Credit approval Explain Gather documents for applications (from 7-60 days) Documents contacts (from 1-5 days) Offering Key to success of new business acquisition flows 1. Enlarge the number of contacts initiation 2. Improve pre-qualification effectiveness 3. Reduce costs of gathering documents (the longest and most time consuming process) - 14 -
  15. 15. Distribution Effectiveness Matrix Reduce costs of Enlarge contact Improve Pre-qualify gathering initiations effectiveness documents Existing Relationship team X and/or alliances Commission Sales X X Telemarketing Sales supported by field X X X sales on closing Branch Network X Mass Media X - 15 -
  16. 16. Successful Telemarketing Strategies • Availability of targeted data base • Industries include printing paper, food, services, metal, wholesalers and importers and distributors selling on open account, e.g. data sources from HKTDC and D&B. • Appropriate incentive structure of • Base salary +commission for pre-qualifying leads telemarketers and arranging appointments for Sales to close/commission for gathering documents for IA/ commission for closing deals. Distribution of salary and commission should be 70%/30% • Appropriate scripts and trainings for telemarketers • SMEloan possesses standard scripts and FAQs • Appropriate follow up process from • Establish Sales follows up process within 24 hours “warm leads” of passing of warm leads • Availability of continued “MASS • Materials to remind prospects of your existence CONTACT” materials and they will call when needs arise - 16 -
  17. 17. What are the customer’s Concerns? Business Pricing too high? Needs? Over-dependence on one bank? Impact on Procedures existing Complicated? Bank Relationship? Control of cash flow for non- financed debtors Effective selling will depend on knowing how SMEs buy. Knowing their concerns and how to address their concerns is crucial. They have to like you too. - 17 -
  18. 18. Addressing Concerns Concerns How to address Pricing too high •Cash financing makes money. •Committed line flexible to support sales increase •Additional interest a small fraction of gross margin •Cheaper than factoring which is based on sales invoices in most cases Control of cash flow for non-financed debtors •High transparency ensures on-going support and line increases •Need to make them understand it is cash flow financing (not A/R factoring) and you want to be their main bank Over-dependent on one bank •Knowing one bank well and doing most business with one bank will ensure continued support •Given them confidence you will continue to support them when their needs change and grow Procedures complicated and ask a lot of documents •Just report information that they know best, I.e. debtors, sales and cash •No need to submit physical documents that are more cumbersome •Same way of borrowers extending open account credit to their buyers Impact on my existing relationship with a A/R debenture •Cash flow financing ensure flexibility to capture opportunities granted to one bank (opportunities are not known when they will occur •You emphasize desire to be their main banker - 18 -
  19. 19. Credit Vetting Process - 19 -
  20. 20. Approval Process Overview Initial Approval - Loan size and Application Scoring Engine advance ratio Credit Vetting Verify the accuracy Final Approval - of information Scoring Engine - 20 -
  21. 21. Credit Vetting - Documents Required a. Identity of applicant d. External Obligation - Business Registration - Leasing - Certificate of Incorporation - Hire & Purchase - Memorandum & Articles - Installment Loan - Agreement and settlement proof b. Identity of owners e. Last 6 months’ sales figures - Identity card copy - Address - Contact number c. Cash and Bank f. Accounts Receivable - Bank facility letter - Debtor listing - Bank statements - Major debtor’s invoices and last - Bills statements payment information - 21 -
  22. 22. In Principal Approval • The principal is to have a “snap shot” view of the financial position of the borrower for the last six months to ensure borrowers are able to meet their obligations and business and cash flow are consistent and steady and their customers are paying them. • Performance of business and cash flow more important than the capability of management • Some of the key data includes: • Industry • Length of existence • Bank financing and obligations • Customer mix • Litigation history • the conduct of the bank account - 22 -
  23. 23. Credit Vetting Process a. Identity of applicant b. Identity of owners - Company search / - Negative file check on all Business Registration search shareholders & directors - Negative file check c. Cash and Bank - Review bank facility for nature & utilization of bank line - Review bank movement for business pattern - Review bills statements for delinquency - Review collection and sales variance d. Accounts Receivable e. External Obligation - Ascertain adequacy of collateral - Check for delinquency - Company search & negative file check - Identify ineligible debtors - Review sample invoices and last payment details - 23 -
  24. 24. Loan Approval - Snapshot of Cash Flow/Business for Past Six Months Account Receivable Source of info comes from SME borrowers Lease obligations Source of info Suppliers comes from bank statements Bank loans Installment loans Employee wages Mortgages Sales Cash The key in loan approval is to make sure companies are doing enough business and collecting enough cash from their customers to pay their bills on an ongoing basis. - 24 -
  25. 25. Highlights on Credit Vetting Process • Recent performance and cash flow, not historical performance • Standard procedures / process to enable fast turn around time • Quantitative and objective assessment - 25 -
  26. 26. Customer Servicing Process - 26 -
  27. 27. Post-Approval Process Overview • Customer Services • Web Training • Cash Management - 27 -
  28. 28. Customer Services • Bilingual Help Desk and Customer Services – Account Inquiry – Advance requests and daily funding issues – Debtor payment status and collection records – Technical support – Portfolio utilization program – Customer referral program – Facility line increase to reward positive performers - 28 -
  29. 29. Sample of Monthly Call Tracking Reports - 29 -
  30. 30. Sample of Monthly Call Tracking Reports - 30 -
  31. 31. Web Training • Setup and Operation – 2 hours per training at customer’s site, able to handle 20-30 customers per month – Activate the Login Name & Generate Password from system – Assist customer to extract data from account system into upload format • Functions and features – Home Page Account Information – Account History Enquiry – Advance Request – Post Invoices – Apply Payments – Upload Files – Outstanding Account Receivables Report – Add/Edit Debtors – Add/ Edit Users - 31 -
  32. 32. Cash Management Process Your bank Scan check and input $ Your bank info into SMEloan $ system Cheque Drop into Cheque Deposit Box at branches You manage any info discrepancy - 32 -
  33. 33. Post-Approval Process Highlights • Scalable operation • Multi-channel support – centralize customer’s inquiry • Effective retention programs – Line increases – Promotions – Referral • Cash management – key to success of account monitoring - 33 -
  34. 34. Risk Management Process - 34 -
  35. 35. Risk Management Methodology • Proactive account monitoring based on current data instead of outdated financial statements • Focus on cash flow, not just collateral • Focus on exceptions on risk management rather than judgmental relationships - 35 -
  36. 36. Risk Management Process Identification Analysis Strategy Action - 36 -
  37. 37. Identification Engage Determine Identification Action Customers Viability • Exception System to evaluate sales and cash flow trend and identify SME borrowers with operating issues - 37 -
  38. 38. Composition of Cash Flow Amount of SME Sales Customers Cash flow Collection from SME Customers These are three pieces of information SME borrowers will always know. - 38 -
  39. 39. Credit Monitoring Cash flow/ Desirable clients Sales Desirable clients Beginning Point Problematic clients Any Deterioration will accelerate the problems Time - 39 -
  40. 40. Operating Problems 1) No Cash – The borrower has not deposited cash collections for 14 days. 2) No Sales – The borrower has not posted invoices for 21 days. 3) Debtor Payment Problem – The borrower’s general debtors collection are not paying promptly 4) Material Debtor Payment – The borrower’s material debtors are not paying promptly. 5) Declining Sales – The borrower’s sales are decreasing for a period of time. 6) Excessive Aging AR – A large portion of a borrower’s accounts receivable are not being collected on time. 7) Aging AR Upward Trend – A borrower’s accounts receivable show an upward trend of receivables aged. - 40 -
  41. 41. Unusual Reporting Activities 1) Unusual activities: Material Dilution – A borrower’s accounts receivable have a large amount of credit adjustments. 2) Invoice Submission During Non-business Hours – A borrower has significant submission of invoices during odd non-business hours. 3) Unusually Large Invoice – A borrower has submitted an invoice value much larger than normal. 4) Large New Debtor Balance – A borrower has added a new debtor whose receivables comprise a large portion of total receivable. 5) Unusual activities: Invoice Cancellation – A borrower has significant invoice cancellation after submission. - 41 -
  42. 42. Engage Customers Engage Determine Identification Action Customers Viability • Engage customers to find out specific payment details that causes problems • Determine their expected time frame for the improvement of sales and cash flow • Transparent to customer and share our views on their cash flow problem - 42 -
  43. 43. Determine Viability Engage Determine Identification Action Customer Viability • Monitor the performance of SME borrowers. Any continuous decline or inability to correct the operating exceptions could result in the conclusion of viability of customers - 43 -
  44. 44. Action Identification Analysis Strategy Action • Negotiate with SME borrowers for loan repayment. Add additional guarantors and collateral if needed • Obtain invoice copies and perform receivable confirmation • Convert cash flow loan to notification basis • If necessary, enforce security interest on account receivable collateral by notifying SME borrowers’ debtors of the assignment of account receivable, effectively becoming owner of account receivable - 44 -
  45. 45. Results • Early warning capability • Improved asset quality • Reduced loan servicing cost - 45 -
  46. 46. Summary • Preferred analytical alternative to traditional risk methodology • Standard criteria ensures institutional consistency • System and defined process enable scalability - 46 -
  47. 47. Loan Recovery Process - 47 -
  48. 48. Crystallization We crystallize means we now convert a floating charge on accounts receivable into fixed charge and amount of account receivable that is going to be collected to repay debts owed to us become crystal clear. Accomplish by simply notifying SME borrowers’ debtors in writing, either in fax, in letter Fax Send Follow up Collect Determine Assignment Assignment Phone calls to Payments Crystallization Letter Letters Debtors From Debtors Account Manager Document Control Document Control Collateral Control Collateral Control Crystallization Process - 48 -
  49. 49. Why would You Crystallize Essentially the last resort as it could have negative impact on SME borrowers’ on-going business We crystallize because: • SME borrowers not cooperative and not willing to negotiate or repay debts after we demand • SME borrowers business deteriorating significantly and is no longer viable • We determine our A/R collateral is rapidly depleting, ie.SME borrowers collecting directly from debtors with an intention of keeping the proceeds Once you decide, must act QUICKLY. Timing is everything. Why timing is important? Debtors who have been notified by the bank, are required legally to pay the bank and cannot pay SME borrowers or risk paying the same amount due twice. - 49 -
  50. 50. Common Mistakes We move too slowly and guarantors skip town or companies are closed down overnight. Must always focus on one key question. Is it a viable business financially and on a cash flow basis? No business can survive with no/little cash flow and no/little sales. There is always a pattern of business and cash flow. - 50 -
  51. 51. Things to Remember in Crystallization Always be courteous as debtors do not have contractual relationship with the bank The objective is to minimize our costs and time of getting paid by winning them over to “pay” us as they are our sources of payments and by being cleared of explaining our position and our rights, sometimes with the help of providing assignment letter documentation or a letter from our solicitor - 51 -
  52. 52. Common Responses of Debtors in Crystallization “There is no balance outstanding” • It is positive as the debtor acknowledges there is such supplier – Make sure we confirm the debtor receives our letter without problems – Seek to inquire when was the last time payment made to supplier – If recent payment within the last 1 month, seek to ask for receipt an payment evidence, ie.receipts issued by SME customers, cancelled check copies, bank statement showing the settlement “I have never heard of this supplier” • Not entirely surprising as debtors do not know who the bank is – We will follow up again for one/two more times – Make sure confirm they receive our letter without any problem – If debtors continue to be reluctant to listen, will have to send legal demand letter to debtors. Typically sufficient to bring debtors into dialogue - 52 -
  53. 53. Common Responses of Debtors in Crystallization “I have paid them recently” • Not entirely surprising as SME borrowers could have tried to collect as much as possible due to their financial problems – Make sure we confirm the debtor receives our letter without problems – Seek to inquire when was the last time payment made to supplier – If recent payment within the last 1 month, seek to ask for receipt an payment evidence, ie.receipts issued by SME customers, cancelled check copies, bank statement showing the settlement “They owe me money too” • It is possible that SME borrowers might have borrowed money from debtors or SME borrowers are in the industry when they collect deposits – Make sure we confirm the debtor receives our letter without problems – Seek to inquire how much was owed and provide proof of claims – Possible to dispute if debtors are owed by SME individually as opposed to the company - 53 -
  54. 54. Common Responses of Debtors in Crystallization “I have given him deposits” • It is likely for some industries to have deposits, especially in professional services and contract related business • Should seek to obtain evidence of deposits “I have moulds and tooling in his factory” • Not entirely surprising as SME borrowers could have tried to avoid having to pay bills owed. Some might even claim for damages because moulds and tooling are with SME borrowers – Make sure we confirm the debtor receives our letter without problems – We will never allow them to claim more than the tools and moulds for producing goods for the invoices outstanding. Debtors cannot claim cost of moulds ten years ago. “Let me check and get back to you” • Positive feedback as the debtors appear cooperative • Always keep a timetable of when to follow up. Be sure to be diligent to follow up and be courteous. - 54 -
  55. 55. Using cash flow lending to enhance competitive edge GOAL: Become MAIN OPERATING bank of SMEs Strengthening overall Strategies Sell cash flow competitive edge Acquiring completely loans to existing against competitors new segment of clients ensuring higher for certain group smaller SME clients client retention of new customers Relationship Manager Telemarketing/Sales Telemarketing/Sales Distribution to increase utilization Advertising Commission sales Channels of existing borrowers Accountant referrals Advertising Loan Size > US$1.25 million US$250K to $2.5 milloin < US$625K Import/Export LC TR Import/Export LC TR Loan Type OD OD SMEloan Export factoring SMEloan SMEloan Additional Complete Data Cash flow Exception system capturing total sales: Point information Domestic Sales + Export LC Sales + Export Open Account Sales + Export DA DP Sales Exhaust all balance sheet assets before you should offer clean facilities to SMEs. - 55 -
  56. 56. How to win business by offering SMEloan? Industry Printing Annual turnover $ 40,000,000 Without SMEloan With SMEloan Bank XYZ Bank ABC Total Total Loan Types Overdraft $ 340,000 $ 300,000 $ 640,000 L/C, T/R $ 1,000,000 $ 1,200,000 $ 2,200,000 $ 2,200,000 Instalment Loans $ 400,000 $ 400,000 $ 400,000 SMEloan $ - $ - $ - $ 2,000,000 Total loans $ 1,740,000 $ 1,500,000 $ 3,240,000 $ 4,600,000 Collateral values Real estate $ 980,000 $ 980,000 $ 1,960,000 $ 1,960,000 Deposits $ 300,000 $ 300,000 $ 300,000 Account receivable $ 7,000,000 Total collateral $ 1,280,000 $ 980,000 $ 2,260,000 $ 9,260,000 Unsecured portion $ 460,000 $ 520,000 $ 980,000 $ - By offering SMEloan to this company, you would be able to get an additional $2.6 million trade and mortgage facility. The key is how much weights and relevance would you place on receivable collateral. - 56 -
  57. 57. How to win business by offering SMEloan? Industry Business form and paper tradiing Annual turnover $ 25,000,000 Without SMEloan With SMEloan Bank XYZ Bank ABC Total Total Loan Types Overdraft $ 500,000 $ 500,000 $ 1,000,000 $ 1,000,000 L/C, T/R $ 4,500,000 $ 1,000,000 $ 5,500,000 $ 5,500,000 Instalment Loans $ 1,380,000 $ 743,000 $ 2,123,000 $ 2,123,000 SMEloan $ - $ - $ - $ 1,600,000 Total loans $ 6,380,000 $ 2,243,000 $ 8,623,000 $ 10,223,000 Collateral values Real estate $ 3,940,000 $ 1,750,000 $ 5,690,000 $ 5,690,000 Deposits $ - $ - Account receivable $ 3,500,000 Total collateral $ 3,940,000 $ 1,750,000 $ 5,690,000 $ 9,190,000 Unsecured portion $ 2,440,000 $ 493,000 $ 2,933,000 $ 1,033,000 By offering SMEloan to this company, you would be able to reduce its clean exposure and control cash flow of the company.. The key is how much weights and relevance would you place on receivable collateral. - 57 -
  58. 58. Thank You - 58 -

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