Hughes Krupica: Raising money from your business assets

Some knowledgeable readers may wonder how the BCA is different to the previous ‘micro-finance’ and ‘nano-finance’ policies of Thai Government and banks of the past. Under those schemes, borrowers simply didn’t have any security but the limits for borrowing were set at 200,000THB for micro-finance and 100,000THB for nano-finance.

Under the BCA, there is no ‘credit limit’. The limit relates to the value of the security in commercial practice.

At the moment, the fees for registration of the collateral contract are unknown, as the fees have not yet been published in the Government Gazette.

This process should be beneficial to those persons who wish to borrow or lend and would prefer some security which is identifiable and registrable, when the borrower doesn’t have land, or the lender simply cannot take security over land – or does not wish to.

Another advantage of the procedure under the BCA is that enforcement of the security is also meant to be faster. It is stated in the BCA and supporting implementing regulations that, in the event of default, a judge must ‘immediately’ arrange for a trial date and the proceedings will be conducted continuously until the civil hearing is completed. This is very interesting, as the courts of Thailand are well known to be overloaded with cases at present, thereby making swift justice difficult.

If the BCA achieves what it is meant to, then there will be better opportunities for businesspeople to make arrangements to develop their businesses and for those that are wlling to help to obtain better protection and enforceable security. This would reduce, one might think, the ‘back of an envelope’-style loan agreements that often pass the desks of lawyers.