Reborn 92's Business Tycoon

Chapter 477: Chapter 477: Capital Management Centre

Lin Hui now earns tens of thousands of yuan a month, which she feels is not enough. Feng Yiping earns at least a million yuan a month, but now it seems like he needs to borrow money. No, to be more professional, he needs to raise capital.

No other company is short of capital, but Yijia Hotel is.

However, the Yijia Express Hotel is developing rapidly and is now planning its twelfth store. Except for the first store, which bought the property rights, all the others are leased properties. However, the renovation costs of each store average more than 3 million. Although the accounts are currently relatively abundant, according to the current development trend, it is expected that funds will be tight in six months.

Banks are not parents, they don't give money whenever you ask for it. If you don't have confidence in the financial situation of your business and if you don't have several banks chasing after you to grant you credit, you can't say that you are in a strong financial position when you borrow money from the bank for the first time and start working on it half a year in advance.

Later, Feng Yiping, who only started a small company, was very self-aware and never bothered the banks.

The most frustrating moments for a man are when he is rejected by the woman of his dreams, or when he spends a lot of time and energy preparing and submitting a lot of information to the bank as required, only to be told politely and casually, 'Your company does not meet our lending criteria!'

You, who thought you were doing pretty well, at that moment, definitely couldn't straighten your back.

But now it's different, several banks are doing their best to get their loans, before they were afraid to ask the bank, now the bank is begging them, Feng Yiping feels quite a bit of a turnaround.

In the meeting room of Yijia headquarters, after going through the thick pile of documents, Feng Yiping said, 'I don't need to look closely, right? Zero debt, abundant cash flow, the growth rate of main business income is at least 50% above, and on average, the operating profit margin of the metal products company with the lowest operating efficiency is also above 15%. The fixed asset valuation is at least 300 million yuan. With these figures, do I still need to worry about getting a loan!'

Everyone laughed. The company had never lacked money. This year, the main reason was that it had bought a piece of land in Hainan to prepare for building a hotel, and the progress of Yijia had been too fast, so there might be a funding gap in the second half of the year.

'What is the interest rate for a one-year loan?' Feng Yiping asked Li Lin.

'All banks are more or less the same, with the lowest at 5.35,'

Feng Yiping felt a little pain. If he borrowed 200 million yuan, the annual financial expenses would be enough to buy a top-level villa in the capital.

He still had nearly 50 million US dollars in his account at UBS Hong Kong, which could be used to turn around the company if invested. However, it was easy to get money in, but hard to get it out, especially US dollars.

Besides, although that money is currently idle, it can bring a high return if used just once. In the future, the start-up capital for other projects will still have to come from gains in the financial market, and it still cannot be moved.

'Prepare for both eventualities. There is no rush to take out a loan. Let's hang on to those anxious banks. First, do another thing, Mr Li,' he instructed Li Lin, 'You start right away and set up a capital management centre. Its main function is to centrally raise, allocate, use, manage and supervise the capital of all subordinate companies, to maximise the efficiency of capital use.

At the same time, you should explain to the banks and the business sector that in the future, the companies can make internal deposits, internal loans and repayments in the capital management centre. I think they will definitely demand that this be done for a fee, right?'

Companies are different from individuals. For example, when we borrow money from friends to deal with an emergency, it doesn't matter if we don't pay interest. But companies are different. Not to mention the procedures for withdrawing funds from accounts, even if it's the same owner, if the financial transactions between affiliated companies are not handled properly, for example, if no interest is charged, there is a risk of tax evasion or capital flight.

'With our current relationship, it is easy to do the work of the banking and business sectors. Internal lending and borrowing must be paid for, so it is just a matter of charging a fee for the use of funds. We can refer to bank interest rates and appropriately increase the internal deposit funding occupation rate, appropriately lower the internal borrowing occupation rate, and not leave the deposit and loan interest spread in the management centre.

However, this task is very labour-intensive. It will take time to formulate the relevant processes and sort out the accounts of each company. At the same time, this will also add quite a few accounting categories. In addition, regarding the management of financial transactions and statements and reconciliations, it is best to ask Zhitong to add the relevant modules to the financial software.' Li Lin gave a complete answer to Feng Yiping's question after a moment's thought.

'President Hong is here today too. You can talk to him about the software. Can you sort everything out in four to five months?' Feng Yiping asked.

Li Lin thought for a moment. 'I have no problem on my end,'

Hong Haoran said, 'It's just adding some modules, it won't take more than two months,'

'That's good, now let's tally up how much surplus each company will have in six months. On my side, the Hong Kong magazine company will be able to withdraw at least 20 million by then,' he was talking about the revenue from the Chinese version. As for the advertising revenue from the English version, it is settled in US dollars, and he doesn't want to touch it for the time being.

'The interior design company can withdraw 30 million without a problem, excluding the cabinet factory, and the furniture factory can also withdraw 10 million,' said Mei Yiliang.

'After deducting the expenses for the possible opening of a branch in the United States in the middle of the year, Zhitong Company can withdraw at least 10 million,'

'Yijia has never stopped expanding, but it has a strong cash flow and can withdraw 20 million without a problem,'

'Xu, how many hotels will be in operation by then? How much cash flow can you expect?' Feng Yiping asked Xu Bin. A budget hotel is not a convenience store. It now takes less than a month to prepare a convenience store for business, while it takes at least a quarter to prepare a branch of Yijia from the preliminary stage to the official opening.

'By then, we will strive to have 15 stores officially open for business. Based on the current average occupancy rate of 63%, plus the Jiasheng Hotel, which will open for business after the National Day holiday,' Xu Bin pressed the calculator, 'between 25 million and 30 million,'

'Let's just say 20 million. This does not include other companies such as logistics companies and metal product companies. Everyone here will be able to withdraw 110 million in half a year, which is more than 65 million after a 40% discount. That is proper planning, and at least there is no need to raise funds from the bank this year.' Feng Yiping stared at Li Lin.

'Ideally, it would be like this,' Li Lin said.

'Good, I formally decide that financing will be put on hold for the time being. I also want to emphasise one more thing: even if we have to borrow from the bank, the fund management centre will be responsible for it. The loans will be repaid centrally, and no company is allowed to contact the bank privately.' After doing the math, Feng Yiping was very happy that they would save enough to buy another villa.

'Also, we need to hurry up and set up a website for Yijia, so that by the second half of the year, we can take online bookings. We also need to get the membership system up and running as soon as possible. For all kinds of promotional activities, such as booking by phone through 400 numbers, consider giving appropriate discounts. As for whether it's 98 or 9 50%, you decide. In short, do everything you can to increase occupancy and strengthen your own financial capabilities. This is a project he is preparing to go public with. In the early stages, you can receive blood transfusions, and in the later stages, just like Yijia, you should use your own funds to build new branches.

'Yes, all of this is being done urgently. Our budget is that as long as 30 branches are in operation, the follow-up can rely on its own funds for expansion,' Xu Bin said.

'That's good. While I'm still here, let's talk about any problems other than funding,' everyone relaxed after the big problem was solved.

Gao Zhiyi opened the door and let the two girls outside in to refill everyone's teacups. Feng Yiping didn't notice that one of them was Feng Jiasheng's eldest beautiful niece, Liu Yuanyuan.