Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsOften SMEs have the same banking facilities years after they have started.A review of existing facilities may highlight that the current facilities andstructure need to be changed to meet the change in business operationsChapter Eleven – RefinancingYour DebtTopic Hint TipMake a list of the reasons why you might considerrefinancing your loan to compare against the loanoffer you receiveRefinancing can involve a number ofalternatives. To achieve the best outcome,ensure that you understand all the alternativesbefore committing to a new lenderRefinancingYour DebtRefinancing a strong healthy business may alsoindicate that there is an opportunity to separate yourpersonal assets from security offered if the valueof the business assets (i.e. commercial land andbuilding, debtors, fixed assets etc) is sufficient tocover the borrowingAfter carefully undertaking a cost–benefitevaluation of refinancing, you may find itbrings a range of new opportunities to yourbusinessBenefits ofRefinancingCommon Dangersin RefinancingFinancial Guide for SMEsEnsure you have undertaken sufficientreview of your circumstances prior to makingany commitments for refinancing, as there aremany pitfalls that may impact any perceivedbenefitSwitching Banks Make a list of all the points and note the prosand cons for each point to help assess whetherto refinanceBanking Review Comparative information on bank finance isavailable on the SME Portal atwww.smeinfo.com.my or Banking Info atwww.bankinginfo.com.my178165 178chapter 7-13 p79-181 Eng.indd 1788/15/11 5:03:12 PM