Business Loans - Absurd Interest Rates Or Am I Looking In The Wrong Place???

[Boarn]

Our company is looking into obtaining a business loan for expansion purposes into another province here in Thailand yet all I can find are interest rates around 13% with Bangkok Bank. Im not sure if this can be correct ? Has anyone got business loans here and if so what interest rates have you paid?

 

https://www.bangkokbank.com/-/media/files/personal/other-services/view-rates/loan-interest-rates/2021/loanrates_1apr2021.pdf?la=en&hash=2C996619C3ADA93635ED066733D46A2DD2EC4286

 

Ideally no collateral, however collateral could be possible. Never looked at financing here before but if this is accurate with actual interest rates at 0.5% this is appalling, we have a strong 5 year growth track record but want to grow faster, not possible with these interest rates. I was expecting to pay about 5%, anything below 7.5% would still be profitable.  

[worgeordie]

No collateral ....... good luck with that.

regards Worgeordie

[ezzra]

No bank in the world will land you money on a projected future income, why do you think that Thai bank be any different? and this is why loan sharks are in existence everywhere...

[Cake Monster]

Collateral will be required upon any Loan issued by any Bank.

I cannot see it being any different here than it is in the UK

You will probably also have to submit Audited Accounts for maybe the previous 2 full Financial Years, and possibly a Business Plan on your proposed Expansion.

13 % seems about right for Thailand on a Business Loan.

Thailand has some very high borrowing costs for Loans, Mortgages Etc.

[Kwasaki]

1 hour ago, Boarn said:

Ideally no collateral, however collateral could be possible. 

Even with collateral you will have to shop around,  who you bank with will be the best rate usually. 

[mvdf]

17 hours ago, Boarn said:

Ideally no collateral, however collateral could be possible. Never looked at financing here before but if this is accurate with actual interest rates at 0.5% this is appalling, we have a strong 5 year growth track record but want to grow faster, not possible with these interest rates. I was expecting to pay about 5%, anything below 7.5% would still be profitable.  

Banks are most cautious these times and as for the interest rates it is what it is. No amount of exasperation and rolling eyes will change that. 

 

Good luck with getting that loan application approved sans collateral.

   

[bbabythai]

18 hours ago, ezzra said:

No bank in the world will land you money on a projected future income, why do you think that Thai bank be any different? and this is why loan sharks are in existence everywhere...

Actually you're incorrect. If your wife is a Dr any bank will and rate will be good

[bbabythai]

17 hours ago, Cake Monster said:

Collateral will be required upon any Loan issued by any Bank.

I cannot see it being any different here than it is in the UK

You will probably also have to submit Audited Accounts for maybe the previous 2 full Financial Years, and possibly a Business Plan on your proposed Expansion.

13 % seems about right for Thailand on a Business Loan.

Thailand has some very high borrowing costs for Loans, Mortgages Etc.

Yr first sentence is incorrect. If your wife is a Dr then there are banks that dont require collateral

[Boarn]

20 hours ago, ezzra said:

No bank in the world will land you money on a projected future income, why do you think that Thai bank be any different? and this is why loan sharks are in existence everywhere...

Yes they do, there would of course be a director guarantee in place, they would take into account the credit history of the directors eg multiple car loans paid off, credit cards always paid on time and in full, mortgage paid off etc. 

 

We can provide collateral however in this case would expect a very low interest rate, not 13%.

[ericthai]

13 hours ago, bbabythai said:

Actually you're incorrect. If your wife is a Dr any bank will and rate will be good

Why are you talking about his wife??

he is looking for a business loan has nothing to do with her.

 

[Freddy42OZ]

On 8/17/2021 at 1:51 PM, Boarn said:

Our company is looking into obtaining a business loan for expansion purposes into another province here in Thailand yet all I can find are interest rates around 13% with Bangkok Bank.

 

What type of business?  You say you can only find Bangkok Bank rates but have you spoken to other banks? 

[1FinickyOne]

On 8/18/2021 at 11:54 AM, Boarn said:

We can provide collateral however in this case would expect a very low interest rate, not 13%.

The interest rate will represent their risk assessment of you and the business... having paid off loans in the past only helps very little. They are essentially taking all the risk of your expansion... tough times for that. 

 

Venture capital can be quite expensive in normal times. [15-20%] You go bust, they get nothing... 

 

W/o knowing the details - 13% doesn't sound out of line... but, of course you will shop it around. 

[natway09]

Some years back we borrowed to fund a large contract.(signed & deposit paid)

1.5% a month & we had banked with them for 8 years, so yes, sounds about right.

Do not confuse with a  home loan rate.

[chalawaan]

Why now?

 

I'm seeing an epedemic of very expensive renovations in my gated community.

 

These are impressive double storey homes (McMansions as the Aussies say) these are homes that have lain unoccupied for up to five years, and our powerful village committee has rightly already turned on wideboys who thought they'd turn their cribs into mini-resorts for Chinese to have frat parties in, including fleets of scooters!

 

So what's my point? This economic activity makes no sense to me, Chiang Mai has too much empty real estate, and these guys are going all in, stripping down to shells, and building damn nice places. But why?

 

I am convinced there's serious domestic unrest ahead, and likely a new global cold war to boot. How that will impact Thailand is likely to be profound, I doubt they will be able to play off the Eagle and the Panda and have it all their way for much longer, and the side they choose will have profound implications for us.

 

So apart from your borrowing woes, none of this flurry of activity you're planning, and I'm seeing, makes much sense with the bigger picture looming dark ahead.

 

We never lived through WW2 most of us were not even born until after it, I think we severely underestimate the catastrophes ahead, and they won't be unfolding on TV they'll be happening right in our Soi.

 

Good luck anyhow, rather you than me.

 

 

 

 

[MrJ2U]

On 8/17/2021 at 3:45 PM, Cake Monster said:

Thailand has some very high borrowing costs for Loans, Mortgages Etc.

They need to cover the many loans that have and will default.

 

 

[spidermike007]

Thai banks are notoriously stingy, tight fisted and difficult. And the rates are very high. I sure hope I never have to borrow from them. 

[soi3eddie]

Best option is to befriend a bank manager. I'm not saying that flippantly as it does work and get results. My ex's family were good friends with a bank manager and loans came easily to build the business which to this day is very succesful and loans repaid. It does take time though. 

[Will B Good]

Doesn't seem too bad. I lend out to businesses in the UK at 7% to a middleman......I imagine the actual borrower must be paying around 10-13%, with a loan to value of around 65%

Edited February 28, 2022 by Will B Good