When a loan is proposed, the assessment and ability of the collection of the capital and interest applicable is carefully taken into consideration. To guarantee the repayment a security is required to serve as a “Back Up” or guarantee should the principal source of repayment (funds to be generated by the business cashflow) fails and all other efforts has been exhausted to recover the debt. Assets financed by the Bank are usually taken as the principal security for the loan.
This is however not applicable for equipment.
Types of Acceptable collateral
In addition, the Bank shall take assignment of insurance on all assets being financed and other assets being pledged/charged.
Type of insurance assigned to the Bank includes
Additional Security
Personal Guarantor In instances where the security cover is not sufficient, the Bank may consider taking qualified Guarantor(s) as additional security subject that the guarantor fulfils the criteria as per the Policy for Personal Guarantor .
A guarantor does not hold a financial value that can be accounted for in the calculation of the security coverage, it however provides the ‘comfort’ that the loan repayment is guaranteed in the event the principal source of repayment fails.
Vehicle:
The Bank will accept a vehicle that is not older than 5 years as additional security and it must be insured under full comprehensive insurance throughout the duration of the loan.
Legal Fees
All clients are required to make their own contributions towards payment for registration and preparation of legal documents such as mortgages, floating charges, pledges, etc. The fees may be incorporated as part of the loan.