Loan For New Business

[BillR]

I have an existing business (1.5 years) which has about 4mil baht in equipment. I would like to open a new business and use the equipment as collateral for a loan. Is this possible? Also, my thai shareholder would be willing to do it in his name if required.

Thanks

[clinique]

without knowing the details of your accounting,, but the answer is yers as long as your company complies with thai law and your thai shareholders agree..

dont expect a high % loan though ??

[torrenova]

Quite similar to a question I posed but whilst the banks publish the maximum LTV they will take on for houses (generally 80% or thereabouts) and the income cover they want (around 250% of free income for the housing loan) they don't put anything out for commercial loans. They say they loan against assets but yours is a depreciating asset. If you bought it 2 years ago for 4m then is it worth 2m ? and if you had to sell it could you raise 500k for it ? If you could raise 500k then they would still need to depreciate it further during the period of the loan so that if the loan was 2 years and the future value in 2 years would be 250k then perhaps they might lend 40% of that so 100k ?

No idea on the actual numbers but the principle would be similar.