Bangkok:In the face of uncertain economic conditions, Surachai Kamplanonwattana, the former Deputy Managing Director of SME D Bank, advises small and medium-sized enterprise (SME) owners to exercise caution and avoid going "all-in" with their financial resources.
According to Thai News Agency, Surachai highlights the challenges SMEs face due to unpredictable disasters, rising costs, and declining purchasing power. He points out that debt issues are exacerbating these challenges, as interest continues to accumulate even during periods of business downturns. Many entrepreneurs, especially those lacking working capital, may find themselves selling off assets or resorting to high-interest loans to stay afloat, which can be detrimental in the long term if not managed properly.
Furthermore, year-end financial reviews by banks pose additional concerns for businesses experiencing revenue declines or extended collection periods. Surachai notes that banks may encourage preventive restructuring to avoid debts becoming non-performing loans (NPLs). While this may impact credit histories, Surachai argues that proactive management is preferable to waiting for a business collapse.
Surachai advises against borrowing more money without a clear plan and instead recommends that business owners assess their budgets, identify areas for cost reduction, and convert existing resources into cash. He emphasizes the importance of contingency planning and financial vigilance to preserve opportunities for recovery and growth in uncertain times.