Financial, tax reports important for obtaining loans

Small and medium businesses should pay more attention to financial and tax reports when applying for loans, HCM City Credit Guarantee Fund deputy head Tran Buu Long said on Saturday.

He was speaking at a discussion in the city organised by the Saigon Entrepreneurs Club, HCM City Credit Guarantee Fund and the Orient Commercial Joint Stock Bank (OCB).

Long advised enterprises to improve their capacity to complete financial and tax reports prior to applying for loans.

The reports must be transparent, Long said, not only for the bank and the guarantor but also for future investors in the company.

Companies should also pay taxes on time because overdue tax payments had a negative impact on loan applications.

“Our fund will not issue a credit guarantee to an enterprise with overdue tax bills or tax fines,” Long said.

Maintaining a healthy credit record on the black list of the Credit Information Centre would also assist a loan application, he said.

Plus enterprises should have at least 10 percent of the capital for the investment project or business plan for which the financial assistance was being sought.

This showed the management’s commitment to their plans, he said.

Many small businesses outsourced their accounting, which was frowned on by banks, Dien Quang Technology Joint Stock Company director Nhu Tin said.

He advised firms to employ their own accounting staff.

OCB deputy general director Tran Hoai Phuong stressed the need for persuasive business plans as well as debt payment plans.

“Banks and credit guarantee organisations need such information,” Phuong said.

Being a member of an organisation like the Sai Gon Entrepreneurs Club would also be an advantage, he said.

National Monetary and Financial Policy Advisory Council member Dr Tran Hoang Ngan said bank credit specialists could advise firms on the most experienced consultant.

A co-operation agreement was reached at the meeting to help enterprises to gain access to the bank’s capital. – VNS

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial