Lowyat.NET: Latest topics by onionchong

Have some cash, what to invest?

onionchong — Sat, 05 Jun 2021 14:58:02 +0800

Hi guys, I've saved some cash and looking to invest in somewhere else to generate consistent return.

My only criteria for investment is that the investment must be able to provide consistent returns every month. You guys have any idea where to find such investment?

Looking for investor, 36% return per year

onionchong — Fri, 31 Jan 2020 20:30:39 +0800

Amount required: RM4mil
Interest offered: 3% per month
Tenure: 1 year
Collateral: Property in KL (market value more than RM4m)

ONLY interested party.

Whatsapp 0176600394 directly. No PM.

TQ

Looking for investors

onionchong — Fri, 01 Nov 2019 10:22:06 +0800

We are a group of experienced bankers with extensive connections with multiple GLCs in Malaysia.
Currently we have an opportunity to earn approx 12-15% p.a. from some financing arrangements.
However, due to short of funding, we have no choice but to crowdsource for funding to support the large capital requirement.
Details as follows:

Investment per block : RM50k
Minimum blocks to join : 2 blocks
Expected return p.a. : 12% - 15%
Risk level : Medium to low
Investment duration : 6 - 12 months

Interested please pm

Anyone working as procurement officer in GLCs?

onionchong — Wed, 10 Apr 2019 11:04:43 +0800

Hi there,

I need some advice on working as a procurement officer in GLCs. Recently I've received an offer from one of the GLCs to join their procurement division, with job responsibilities such as to manage suppliers and source for raw materials. The pay and benefits seemed good.

As such, if anyone has experience working in similar field, kindly advise what the job scope entails and what is to be expected from jobs like this?

Thanks!!

Will you invest in startups?

onionchong — Tue, 19 Jun 2018 20:41:07 +0800

Hi guys,

I'm just curious whether do you invest in startup companies? If so, which kind of startups do you invest?

Startup looking for investors -

Thu, 01 Jan 1970 07:30:00 +0800

Startup looking for investors -

onionchong — Mon, 18 Jun 2018 22:16:03 +0800

Hi guys,

My company is a startup in mobile app related to the viral news, social media & networking industry.

Currently we are growing and looking for investors to scale up our operation. Below is a brief summary of the status of our startup:

1. Product ready - app launched in both App & Play store.
2. Solid team - we are a balanced team of 8 members consist of IT and marketing specialists.
3. Building traction - we are gaining downloads and usage on the app.

We are looking for serious investors only. If you're interested to know further, kindly leave a message and I'll get back to you soonest as I can. Or else for faster response please text me via WeChat - mryangchong0826 or Whatsapp - 017-6600394.

Cheers!

Funding for Tech Startup

Thu, 01 Jan 1970 07:30:00 +0800

Funding for Tech Startup

onionchong — Tue, 05 Jun 2018 03:55:12 +0800

Hi all,

We're a recently established mobile app company with an area of focus on social media discovery.

The app development stage was initially funded by individual investors and it's now functioning on the playstore & appstore. User traction is also picking up and we're planning to scale up within the near future.

Right now the purpose of raising fund is mainly for commercialisation and mass marketing.

Feel free to contact if you have any form of enquiry/feedback/assistance. Thanks.

[Sharing] Getting Business Loans from Banks

onionchong — Sun, 27 May 2018 22:36:12 +0800

Getting business loans from banks

Hi guys, this is a post dedicated to all Startup/SME business owners in Lowyat forum. In this post, I wish to share and explain the concept of business financing from banks and the technical terms surrounding it as I noticed that Startup/SME owners in general are inadequately equipped with important banking knowledge in business finance hence led to some of them being taken advantage by bankers.

1. Terminology
Bank financing is colloquially known as bank facilities/credit line/business loan. To be more specific, it could be termed as trade lines and term loans, depending on the facilities granted which I will go into detail later. Just remember that when we say bank facilities, we are talking about obtaining bank financing for businesses!

2. Purpose of financing
The main (and correct) purpose of financing is always to finance business expansion. It is an incorrect mindset to take up facilities to repay existing debts or commitments because you will be digging bigger and bigger holes and this means disaster!

Generally, there are 2 types of business expansion, namely CAPEX and working capital expansion. CAPEX expansion is referring to expansion in fixed assets i.e. purchase of warehouse/office/equipment whereas working capital expansion is expansion in production/trade cycle i.e. raw material purchases, inventories, receivables and etc.

3. Types of financing
For financing of CAPEX which are mostly long-term in nature (> 1 year), term loans such as property loan (for buildings), hire purchase (for machines/motor vehicles) & construction loans (for construction) will be granted depending on the eligibility of the company (explained further below).

For financing of working capital which are short term in nature (< 1 year), trade facilities such as LC (Letter of Credit), BA (Banker's Acceptances), TR (Trust Receipts), OD (Overdraft), BG (Bank Guarantee) and others are usually provided. These facilities are used for financing of purchase of raw materials or trade receivables as well as various short term purposes. For further details on trade products you may follow this link: https://www.cimbbank.com.my/en/business/pro...es-at-cimb.html

For now, just understand that it is important to understand the objectives of financing to obtain the suitable facilities to support your business growth.

4. Eligibility criteria
Many business owners are confused on the minimum requirements to obtain bank financing simply because they do not understand the inner workings of banks when deciding a potential of a company. I'll list out some of the crucial considerations here for your basic understanding:

Basic criteria (the list is not exhaustive):
i. Minimum business operation of 3 years. Note that this is not only about company incorporation. Your company must show revenue/in operation for at least 3 years to qualify. For example, if your company was incorp. in 2010 but revenue only came in in 2016, your company has 2 years of operating history therefore does not qualify for bank financing.

ii. Revenue threshold. Depending on the facilities applied, most banks impose a minimum revenue threshold on companies to be eligible for financing. The most common threshold is RM1mil whereas some go as high as RM3mil.

iii. Profitability record. The company must show a profit before tax in latest year revenue to qualify. However this criterion varies from bank to bank. Some require at least 2 years' profitability out of the last 3 years whereas some require 2 years of consecutive profitability. Some don't even need to show profitability as long as other criteria are met!

iv. Shareholding structure. Usually for SME facilities, banks require the applicant company to be at least 51% owned by local residents i.e. Mykad holders. Some banks also prohibit the applicant company to be in any way owned by listed companies.

v. Payment track record. This is standard across all banks in which the banks will assess the payment record of borrower via CCRIS or CTOS. Normally smallish outstandings are tolerated although it may affect the credit ratings of your company. The best practice is always to maintain a clean and prompt payment record.

Advanced criteria:
i. Financing limit. Depending on the facilities applied and on the bank's policy, the financing limit or margin may vary from one to another. For example, it is not unusual for banks to finance up to 80-90% for purchases of offices & commercial properties. The limit for asset financing i.e. properties, cars & equipment is quite straightforward as the limit is derived from a certain % of the underlying asset.

However, things are getting more complicated for working capital financing. For trade lines, the financing limits are derived from the working capital cycle of the company which, in general, calculated by adding inventory turnover period and receivables period and minus payables period.

For example, consider a company with inventory days of 30 days (means it holds stocks up to 30 days before selling them), receivables days of 60 days (means the company takes up to 60 days to collect money from customer) and payables days of 30 days (means it takes 30 days to repay suppliers for items purchased). Then, it translates into a working capital cycle of 30 + 60 - 30 days = 60 days. Let's say the company's annual turnover is RM50mil, the working capital requirement in RM is 60/360 x RM50mil = RM8.33mil. This is the limit that banks can finance. Easy, isn't it? For further information on WCR computation you may refer to this website: http://www.planprojections.com/funding/how...al-requirement/

You may also pm me or reply below if you need help on this.

ii. Important financial indicators
- DSR (Debt service ratio): This is the commonest indicator to judge whether a business has the ability to service its debts. The computation is by dividing EBITDA (earnings before interest, tax, depreciation & amortization) with total annual debt obligations of the company (EBITDA/Annual debt obligation). EBITDA is calculated by adding back finance charges, taxes paid & depreciation charged to the net profit of the year. Annual debt obligation is calculated by adding all term loans maturing in 1 year as well as annual interest charges for trade lines. The higher the figure the better for the company as it indicates better debt serving ability of the company. The minimum threshold is usually 1x to 1.25x depending on banks' policy. Any figure lower than 1x indicates that the company has not generate sufficient money to cover its debt payments hence it is a red flag for banks. You can learn more about DSR calculation here: https://en.m.wikipedia.org/wiki/Debt_service_coverage_ratio

- Gearing ratio: This is a financial ratio to measure the level of borrowings of a company compared to its capital employed. A high ratio means the company has taken too much borrowings and might indicate potential cash flow problem in servicing debts. A high gearing also suggests a lack of financial commitment of the company owners (low capital relative to borrowings) hence banks might be unwilling to extend facilities because they are at an unequal position. Typically, depending on the nature of the business, gearing of up to 3x (i.e. bank borrowings of RM9mil vs capital of RM3mil) is considered acceptable and anything beyond that might raise concerns.

iii. Nature of business
In general, as its name indicates, trade lines are usually catered to trading and manufacturing companies whereas term loans are applicable for all businesses as long as it involves asset financing. However, there are internal policies restricting certain banks to deal with companies with certain business activities. Some common ones including money changers, gambling business, religious businesses, precious metal, mining businesses and etc. These prohibited activities are usually refreshed every year depending on the economy of the country. For example, in 2016 when the oil prices tumbled badly, many banks are restricted from financing oil & gas companies as the industry was hit badly.

There are many more considerations made by banks in the loan approval process other than those listed above. If you're interested to find out whether your company is qualified or solid enough in the eyes of banks, feel free to pm me and I'll try my best to assist you.

5. Bank charges
Business owners have to familiarize yourself with the term "BLR" or Base Lending Rate. It is an interest rate upon which the pricing/ interest rate of facilities will be based on. Different banks have different BLR. The BLR is in turn based on the Bank Negara's OPR, which changes once or twice a year depending on the economy of the country. It is important to note that the main factor influencing the pricing of loans is the perceived credit risk of the company to the bank. In other words, the more financially solid your company is, the lower pricing the bank will charge. Besides the company itself, the type of facilities also influences the pricing charged. For relatively low-risk financing such as property loans where the loan is fully secured against the underlying asset, the interest is usually charged at BLR minus a certain percentage, i.e. BLR - 2.1%. If the BLR of a bank is 6.96%, the final interest rate is therefore 4.86%. Whereas for high-risk facilities such as OD, the interest rate is usually expressed in BLR plus a certain percentage. (More on security & collaterals below)

It is therefore important to note that different banks have different focus areas and risk appetites, which may lead to difference in interest charged. For example, banks like Public Bank is strong in asset financing with a relatively conservative risk appetite. Banks like RHB, HLB, UOB and Alliance Bank are established in the SME market in which they place higher emphasis on trade finance and generally have higher risk appetite. Newer entrants such as Al-Rajhi and Affin Bank are more flexible in loan structuring due to their relatively nimble size.

Due to these differences, it is highly advisable for business owners to understand the financing objectives to secure the best offer out of the various choices.

6. Collaterals & Securities
Collaterals and securities are often used interchangeably, both referring to the underlying asset pledged to the bank in return for the facilities applied. Normally it is expressed in a certain % relative to the loan limit and takes the form of FD, property or guarantees. Depending on the strength of your company, the facilities granted could be fully secured (collateral amount > facility limit) or partially secured (collateral amount < loan limit). In the current economy, a financing package is usually secured by at least 25 - 30% of the total loan limit. Lower security coverage indicates higher risk to the bank which translates into higher interest charged.
Do note that the amount of security is subject to negotiation. If the bank is less comfortable with your company, they might request for higher security to make up the higher perceived risk on your company.

7. Risks
You might ask whether bank facilities are suitable to finance your company at this juncture. To answer this, it is crucial for you to understand the risk associated with taking loans from banks to fund your business.

First of all, bank loan is a form of debt financing. Repayment of the loan is compulsory, failing which will lead to serious and far-fetched implication on your company i.e. legal actions, foreclosure or, worst, bankruptcy.

Secondly, you may risk losing some controls over your company as banks might impose certain terms & conditions in return for the approval of the facilities. One example would be by imposing a so-called "negative pledge", in which you have to obtain the current bank's consent should you wish to raise additional funds from other banks.

In view of the factors above, bank facilities are usually suitable for companies which are established and with solid financial track record. For startup companies or companies without solid financial history, equity financing would be more suitable but it also comes with its pros and cons.

As a conclusion, above are the basic information about business financing just for your kind reference. As an SME owner, it is crucial for you to acknowledge the best funding method and the risk associated with it to expand your business efficiently. You may reply below or pm me should you have any queries on this topic. Cheers!

About angel investing..

onionchong — Sun, 08 May 2016 12:52:20 +0800

I wonder if angel investing is still in infant stage in Malaysia? I have a good project but couldn't seem to get access to angel funds easily.

Anybody can advise me on how to look for angel investors?

Thanks!

Looking for investor(s)

onionchong — Sun, 08 May 2016 12:27:14 +0800

Hi Guys! Me and my team is currently working on a mobile app project. We have a complete and validated idea but progress is obstructed due to lack of funding. We need YOU to join our team to make it happen!

Here are some info about the project:
1. Industry: Social media mobile app (Android & iOS)
2. Team: Established team with 1 experienced developer (> 20 years exp) and 3 marketing & commercial personnel.
3. Funding required: RM40,000
4. Estimated return: 150% - 250% in 3 years. Investors are also entitled for equity.
5. Purpose of funding: As a payment to a team of developers for app development.
6. Project milestones: Validated idea, development plan ready, pending for funding.

We are looking for only 1 investor.
Please Pm / Whatsapp 017-6600394 for more details about the project.

Thank you.

Selling stuff? Set up a webshop quick and free!

onionchong — Thu, 05 Feb 2015 16:20:02 +0800

Hi, do you have products to sell?
I can set up an online shop for you for free.
It comes with comprehensive payment gateways accepting major payment methods i.e. Visa, Master, Amex, Maybank2U CimbClicks and etc.

I can design a logo for your shop for free too!

Please pm me or leave a message here if you wish to know more. Thanks!