Financial Guide for SMEs - SME Corporation Malaysia
Financial Guide for SMEs - SME Corporation Malaysia
Financial Guide for SMEs - SME Corporation Malaysia
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Cash Flow Forecast<strong>Financial</strong> <strong>Guide</strong> <strong>for</strong> <strong><strong>SME</strong>s</strong>A cash fl ow <strong>for</strong>ecast is probably the most important in<strong>for</strong>mation <strong>for</strong> the lender. Itwill provide the necessary detail to a potential fi nancier on the cash available topay back the loan (refer to Chapter 6 <strong>for</strong> in<strong>for</strong>mation on how to prepare a cashfl ow <strong>for</strong>ecast).Profit and Loss BudgetA profi t and loss budget will indicate to the potential lender whether the newbusiness plan is profi table (refer to Chapter 3 on how to prepare a profi t andloss budget).Personal In<strong>for</strong>mationAlthough lenders are in the business of lending funds to businesses, they like tomake sure that the funds will be repaid. One of the most important indicators <strong>for</strong>them will be your own personal spending habit, which will show them how youmanage your own fi nances, and will be particularly important when the businessloan application is <strong>for</strong> a business start-up, where history of the business patternhas not yet been established.When you are applying <strong>for</strong> a loan, it is most likely the lender will undertake apersonal credit check and the authorisation to do so is usually included in yourapplication <strong>for</strong>m. A clear report would indicate that you have not, in the past,defaulted on any payment obligations and this will impact positively on yourbusiness application. There<strong>for</strong>e, maintaining a sound personal credit record orrating is very important. Paying your credit cards and personal loans on time willbe considered favourably by a lender, as it helps to prove that you are able tomeet your future debt obligations on time.The types of personal in<strong>for</strong>mation the lender will be looking <strong>for</strong> can include:• Personal assets - purchase price and date, independent valuation ifavailable, ownership documents (i.e. mortgage or leasing agreements)and, <strong>for</strong> any policies, the most recent policy statements;• Tax returns - you may be required to supply supporting documentation tothe tax schedules such as proof of income from investments etc; and• Personal bank details - all statements issued from the bank or fi nancialinstitution. For bank loans, include the original loan agreement as well asthe statements.138chapter 7-13 p79-181 Eng.indd 1388/15/11 5:03:05 PM
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