‘Don’t Rely On Bank Loans To Expand Business’
BANDAR SERI BEGAWAN
ENTREPRENEURS need to start small and refrain from getting bank loans as corporate bankers are now reluctant to inject capital for expansion due to tough economic times in Brunei.
Brunei Law Society’s President Hj Md Rozaiman DSLK Hj Abdul Rahman said during a recent Darussalam Enterprise dialogue session that entrepreneurs need to have a small operation that has a sustainable cash flow and lower development costs.
He said starting and keeping a small business operation is less risky than getting bank loans for expansion.
“Banks are exercising huge discretion to lenders in the corporate levels. They want to look at the company’s background, source of income, business plans and the collateral,” said Hj Md Rozaiman.
He said it is difficult for entrepreneurs to grow now as international banks are starting to close down in Brunei, citing HSBC and Citibank in his presentation.
He said even when the person successfully gets a bank loan, low cash flow might keep small businesses from paying their obligations.
“Once the loan has been disbursed, there will be times when the business is good, the business will pay more. But if the business is (bad), they would need extra liquidity which banks are reluctant to do now,” he said.
He advised entrepreneurs to always maintain a steady cash flow.
The Brunei Times