Paying for the move to Kovan CC: what we can carry, and what we cannot

• 1. What the business needs
• 2. What HQ can take off the bill
• 3. JY's money, honestly
• 4. Can we pay for it ourselves?
• 5. The condo: how much, and how
• 6. Aiting as a co-borrower
• 7. A friend's loan that can actually be repaid
• 8. Shares and convertibles: parked
• 9. The risks, plainly
• 10. Decision and next steps
• Appendix: loan by loan, and what to confirm

1. What the business needs if we move

The move costs about $273k (fit-out, aircon, HQ design fee, reinstating 780 USR). On top of that the CC wants a deposit of about $55k before our 780 USR deposit ($56k) comes back in March 2027, and the business loses a little money for the first few months in the new place. So the deepest point is about $360k in February 2027 in every growth case (the slow case dips again, to $387k, in late 2028 because of the franchise renewal). After the 780 USR deposit returns in March the figure settles at about $300k.

What happens after that depends on how fast the CC fills. The chart shows the running total of money we have to put in, month by month, and when the business starts paying it back.

PlayFacto Kovan only, before GST, Little Forest costs removed, tender rent $8.00 psf. "Base growth" means 34 children join each January and 76% stay a full year, which is our 2026 pattern. "Slow growth" is our 2025 pattern (30 join, 64% stay). Full detail is in the stay-or-move deck.

The slow case needs more because the $104k franchise renewal falls due in November 2028, and slow growth has not earned enough by then to cover it. That is why a fresh franchise term from HQ matters so much in the slow case and hardly at all in the fast one.

2. What HQ can take off the bill

JY's instinct is right: if Justin is confident in the CC, the honest way for HQ to show it is to share the cost. Three asks, in order of how easy they are for HQ to say yes to. Each is worth a different amount, and they lower the need at different times, which matters for how much we have to borrow and for how long.

So the package is worth about $155k, but only about $20k of it arrives before the February peak. We still have to find about $340k of cash up front; the package mainly means we need it for a shorter time and the business can repay it sooner. That is still a big deal for whoever lends it.

The royalty figures come from the model's fee income in 2027: about $5.1k a month in the slow case, $5.8k base, $6.8k if the CC fills in two years. The franchise agreement (clause 4.10) says relocation means a new agreement with a negotiable term, so a fresh term is a reasonable ask, not a favour. Check it against the signed copy; ours is a 2023 draft.

3. JY's money, honestly

This section is built from JY's Google Keep notes (October 2026) and his own summary of income and spending. Where his summary and the line-by-line detail disagree, both are shown. Nothing here is a criticism; it is simply the picture a bank or a friend will see, so it is better that we see it first.

Income

JY's note says "monthly income with dividend 34k + 20k = 54k". The dividend part is right ($410k over 12 months is about $34k). The salary part is $20k gross but $14k in the bank, so the usable figure is about $48k a month, and only $14k of it arrives monthly.

Spending, each month

JY's summary says "net -38k". The arithmetic of his own lines gives -$28k; using the five loan repayments as listed, it is about -$31k. Either way the message is the same: the household is short by roughly $340-370k a year before dividends, and the dividends bring in about $410k. What is left over is about $40-75k a year. That is the family's entire margin.

Where the $700k of debt sits

Rebuilt loan by loan from the Keep notes (the appendix shows the working). Balances are JY's figures rolled forward at the stated monthly payment, so the instalment loans are estimates to within about $10k.

Two kinds of debt are mixed together here, and they behave very differently:

• The three instalment loans (UOB, Citi, HSBC, about $267k) are boring in a good way. They cost $10.7k a month and simply end between March and August 2029. Nothing can go wrong with them as long as the payments are made. When they end, the household gets $10.7k a month back. That is the point at which the family genuinely breathes.
• The balance transfers and Ben ($432k) are cheap while they last (0% plus a one-off fee of roughly 2-4%), but each one must be paid off in full on its date or replaced with a new one. Replacing them depends on a bank saying yes each time. UOB has already said no. Under the MAS rule (the "industry-wide borrowing limit"), once someone's interest-bearing unsecured debt across all banks is above 12 times their monthly income for three months running, no bank may give them new unsecured credit, and the cards and credit lines they already have are suspended until the debt is back under the line. Balance transfers count. Whether JY is over that line depends on the income each bank has verified on file: if a bank has only the $240k salary, 12 times is $240k and he is far over; if it has the dividends as well, 12 times is about $650k, which is roughly where the $653k of bank debt sits. This is the single most important thing to find out, and it is a phone call to DBS and Maybank: "am I within the borrowing limit, and when my balance transfer ends, can I take a new one?" (Banks may still lend to consolidate the debt even when a borrower is over the line, and the bank's own Debt Consolidation Plan is not open to JY because it is for incomes under $120k.)

Credit still available today: DBS about $98k, Maybank about $81k, so about $179k. UOB shows $130k of room but has refused, so it counts as zero. The month-by-month picture in section 4 leans on that $179k; if the borrowing limit above froze it, the picture would be a good deal tighter, which is another reason to do the consolidation in section 5. The Keep summary line "1,130k of facilities, 986k taken, 82k left" does not match the detail (the detail gives about $650k owed to banks and about $179k usable), and JY has said that line is out of date, so it is not used anywhere in this note.

4. Can we pay for the move ourselves?

No, and the chart shows why. It follows JY's cash month by month from now to the end of 2028 on his own figures: salary in, the $15k home and $10k support out, every loan payment, every balance transfer falling due, and the two dividends a year.

Assumptions: dividends of $200k in January and $210k in June (the 2025-26 pattern); a balance transfer that cannot be paid off is rolled into a new one at a 3% fee; shortfalls are covered from the DBS and Maybank lines; the PFS part of the $10k support (about $5k) stops in 2027 once PFS is profitable, the Little Forest / TDA part continues; the "move paid ourselves" line adds the business's $360k need in Dec 2026 to Feb 2027. Starting cash is taken as zero.

Current course (blue line). The family lives in a saw-tooth: each dividend lifts the account, then five to seven months of -$28-31k eat it, and the DBS and Maybank lines carry the last stretch. The lowest points are about -$107k in December 2026 and about -$87k in May 2027, against $179k of lines. It works, as it has for three years, but the margin is roughly $70k, and every balance transfer on its date needs a bank to say yes again. By late 2028 the picture eases: PFS stops needing support and the DBS transfers are paid down, so the lines are used less. By end-2028 the debt is down to roughly $190k, with the three instalment loans finishing in 2029. (If the move goes ahead with other people's money, JY's own line is a little better than this, because the raise also covers PFS's early losses.)

Paying for the move ourselves (orange line). Putting $360k into the business in December to February takes the account to about -$390k, more than $200k past every credit line we have, and it never climbs back above zero in two years. The January dividend would not even cover the move, let alone Ben and the balance transfers due in the same weeks. This is not a close call.

A short bridge from a friend, repaid from the dividends? Same arithmetic. To repay $300k in 1-2 years we would need $150-300k a year of spare cash. The spare cash is $40-75k a year now, perhaps $100-130k a year from 2027 once PFS stops needing support, and about $230k a year only from late 2029 when UOB, Citi and HSBC finish. So the honest repayment shape for anything we borrow for the move is: little or nothing in 2027-28, the bulk in 2029-30, with the business itself contributing from 2029 if growth is at least our base case. That is a 4-year loan, not a 1-2 year one.

5. The condo: how much could we release, and how

The Vales (executive condominium, completed 2017, so past its 5-year minimum occupation; fully private from around 2027). JY's figures: loan about $600k, value about $1.4m. Banks will lend against an EC once the minimum occupation period is over, so there is no timing problem there. One practical point: while the mortgage is outstanding, the equity loan normally has to come from the bank that holds the mortgage. Another bank would have to take over the whole $600k as well, which costs any lock-in penalty on the current loan and more time.

How much, in principle

Bank rule: 75% of the bank's valuation, minus the loan still owed, minus every dollar of CPF used on the flat plus the interest CPF says it would have earned (2.5% a year). The CPF part is the number we do not know, and it decides everything.

Assumes a loan of $600k and a tenure that ends by age 65 and within 30 years; otherwise the 75% becomes 55% and the figures roughly halve. The CPF figure is on the CPF website under "My Statements, Property": it takes five minutes to pull.

The debt test, with JY's real income

Banks allow total monthly debt payments of up to 55% of recognised income, tested at a 4% interest rate (the broker will call this the TDSR, the total debt servicing ratio). Here is how that comes out:

So as things stand, a bank would decline an extra loan of any size: the existing debt alone is over the 55% line. The way through is to make the new loan replace the balance transfers rather than add to them. If the $300k from the home is used on day one to pay off Standard Chartered ($213k by then) and the April DBS transfer ($54k), the test becomes:

That passes, with $4-6k of room. Three things could still stop it, and they are exactly why a broker earns their keep:

• Whether the bank counts the dividends at all. One-tier dividends do not appear on JY's Notice of Assessment, so the bank cannot see them there. It will want two years of dividend vouchers or bank statements and the clinics' accounts, and some banks will not accept dividend income from a company the borrower controls. Without the dividends, recognised income is $17-20k, the limit is about $10k a month, and no bank will lend. A broker knows which banks accept this income and how they want it shown, without JY making five applications and five credit enquiries.
• Whether the bank will lend to settle unsecured debt. Some will, as a condition of the loan (they pay the other banks directly, or ask for proof of settlement), and the arithmetic above only works if the bank agrees to test it that way. There is also a plainer hurdle: the credit bureau report will show six lenders, about $650k unsecured and transfers being rolled, and a bank can decline on that picture alone before it does any arithmetic. The broker needs to ask for exactly this structure, from banks known to accept it.
• Time. Valuation, approval, lawyer, CPF Board consent, then money: about 6-8 weeks. Applying in the week of 12 October gives early to mid December, which is after the 7 November DBS transfer (roll that one as usual) and just in time for the 9 December one. An in-principle approval (the bank's written "yes, subject to valuation and documents") can come in about a week, and that is what we need for the 23 October decision.

What the home loan does for the family

Read the last two rows carefully: the home loan does not make the debt smaller or cheaper, it makes it slower and safer. The total owed at end-2028 is higher because the balance transfers would otherwise have been paid down at $9k a month. The cost is about the same either way: roughly $9k a year of interest at 3% on $300k, against roughly $8k a year of fees to keep rolling the same $267k of transfers. What the family buys for that is the removal of the cliff and a real cushion. The one true cost is that the family home now stands behind debt that was unsecured before: if the dividends stopped for a long time, the bank could take the flat. That is a serious thing and both owners should weigh it; it is also true that the current arrangement, where a bank can refuse a rollover at any time, is not safer.

How much of the home could go to the move?

Only what is left after the consolidation. At a $1.4m value with $100k of CPF used, that is about $350k released minus $267k of transfers retired, so about $80k; that would cover the CC deposit bridge until the 780 USR deposit comes back in March. With $200k of CPF used there is nothing left for the move at all. Plan on the home fixing the household, not funding the CC. If the CPF figure turns out to be small, treat anything extra as the standby.

Two smaller routes, in case the full loan is refused: an equity loan that keeps total borrowing at or below 50% of the value is exempt from the debt test, which at $1.4m is $100k ($700k minus $600k); it would retire the November and December DBS transfers. And JY's current bank may do a repricing plus a top-up faster than a full refinancing to a new bank. Avoid non-bank "home equity" lenders at 5-15%; the flat is still at risk and the cost is far higher.

6. Aiting as a co-borrower

The idea was to raise Aiting's salary for about six months so that she could take part of the loan. Here is how that works in practice, and the version that does work.

What banks need to see. For an employee: the last three months' payslips, the last 12 months of CPF contributions, and the latest Notice of Assessment. If the person is a director or significant shareholder of the company paying the salary, banks treat them as self-employed instead and want two years of Notices of Assessment, then count the income at 70%. Aiting is a director of PFS (and Little Forest), so a salary from either company would be judged on tax returns that do not exist yet: YA2027's notice arrives around mid-2027, YA2028's in 2028. Six months of payslips from our own company will not move a bank in October 2026, however genuine they are.

The legitimate version. If Aiting is doing real work for PFS or Little Forest (she is: she runs the centre and met Justin), paying her a proper, declared salary for that work is right and sensible for its own sake, and in time it does count. It would need CPF (17% from the employer, 20% from her, on pay up to $8,000 a month), income tax on it, and the money actually leaving the company and landing in her account. The cost is real: at $6,000 a month, PFS pays about $7,000 a month including employer CPF, about $84k a year, out of a company that is losing money. It would raise the business's cash need, not lower it. And it only counts in 2028, not now.

The version that does not work. A temporary pay rise on paper, with no change in her role, created so that a bank will lend, is a false declaration of income. A bank that finds it can call in the whole loan, and it would sit on both your credit records. Not worth it, and not needed: the real route through the debt test is the consolidation in section 5, not extra income.

Co-ownership. If Aiting is a joint owner of the flat, she signs anyway and her existing income (if any) is counted. If she is not on the title, most banks will not add her as a borrower on a housing loan at all. Worth checking the title before planning around her.

7. A friend's loan that can actually be repaid

JY's preference is a loan with a fixed return and no shares. That is fine, and simpler for everyone. What has to change is the timing: the money the friend gets back comes from the business and from JY's dividends only after the instalment loans end, so the loan has to run to 2030. Proposed terms, written so a non-financial friend can read them:

Where the repayments come from, year by year, on base growth: 2027 nothing; 2028 nothing (the business keeps its cash for the Nov 2028 renewal if HQ will not waive it); 2029 the business contributes about $100-140k and JY about $60k; 2030 the business about $140k and JY the rest. In the slow case the business contributes about half of that and JY's dividends carry the balance into 2031, which is why the deferral clause is there.

A short note on Ben: the $50k due in January 2027 is also a friend loan on the Keep list. The January dividend covers it. Keep that promise before taking on a new one.

8. Shares and convertibles: parked

The earlier note recommended a convertible loan: a loan that turns into shares if it cannot be repaid. It is still the right tool if a friend wants a share of the upside, or if nobody will lend for four years at a fixed return. But JY is right that it is not needed for its own sake: the business can repay a fixed loan on base growth, HQ's package shortens the time, and the four-year term removes the main reason the convertible was there (the fear of a demand for cash in 2028 that the business could not meet). So: fixed-return loan first; convertible only if the lender asks for upside, at the terms in the earlier note ($900k valuation, with unpaid amounts converting at $600k). HQ or Justin investing directly would still be welcome and would say more about their confidence than any waiver.

9. The risks, plainly

• One bad dividend round. Everything rests on four or five clinics paying about $200k every six months. They have done so three times running. If one round came in at $120k instead of $200k, the household would be $80k short in that half-year, which is roughly the whole margin on the credit lines. This risk exists with or without the move. The consolidation in section 5 is the best protection: it turns the May and December low points from about -$90k to about -$40k.
• A balance transfer that cannot be rolled, or a credit line that is frozen. $60k in November, $40k in December, $60k in April, about $190k in August (Standard Chartered, after the $3k a month paid down). UOB has already refused. If JY is over the MAS borrowing limit (section 3), the DBS and Maybank lines could be suspended as well, and the whole saw-tooth in section 4 depends on them. This is bigger than the business decision, and it is the reason the bank calls and the broker come first on the list below.
• The family home. A home equity loan puts the flat behind the debt. Both owners must be comfortable with that, in writing, before anything is signed.
• Living carefully for longer. On current course the household breathes properly from late 2029, when the instalment loans end. The move does not change that date if the move money comes from outside; it does add JY's guarantee on a $300k loan until 2030. If the move were somehow paid from personal cash, the careful years would stretch to 2031 or beyond, which is the main reason not to do it that way.
• Slow growth at the CC. In the slow case the business cannot repay the friend from its own cash; JY's dividends do it in 2029-31. If HQ refuses a fresh term, the business also has to find the $104k renewal in November 2028 before any of the move money has come back, so the total need stays at $340-390k until 2029. The $50k standby should be identified before we bid, not after.
• The 780 USR thread. If our September emails already bind us to the renewal, moving could mean rent on two premises. The lawyer's view on this is a gate, not a nice-to-have.

10. Decision and next steps

1. Fri 9 Oct (JY) Call DBS: confirm the 7 Nov $60k date and whether the Jul 2025 loan is the same one; ask DBS and Maybank whether you are within the MAS borrowing limit and whether a new balance transfer is still available when the current ones end. Pull the CPF property statement, the latest mortgage statement (balance, rate, lock-in date, which bank), the last three Notices of Assessment, two years of dividend vouchers or bank statements, and a Credit Bureau report (about $8, online).
2. By Mon 12 Oct (JY) Speak to a mortgage broker (free to you; the bank pays them). Brief: equity term loan of about $300k on The Vales, to be used to settle the Standard Chartered and April DBS balance transfers at disbursement; income is $20k salary plus $410k of dividends from companies JY owns; which banks accept that income, and what in-principle figure can they give by 20 October.
3. Tue 13 Oct (Aiting) CC site show, 2pm. Confirm the deposit amount and date, and that student care with a 7am opening is allowed.
4. By Thu 15 Oct (Aiting with JY) Send Justin the three asks with their values ($15k fee, $32-40k royalty holiday, $104k fresh term) and ask for a written answer by 20 October. Ask how fast the other CC outlets filled.
5. By Fri 16 Oct (JY) Lawyer: does the September correspondence bind us to 780 USR? Quote for a simple loan agreement with the friend.
6. By Mon 19 Oct (JY) Sound out one or two friends with the section 7 terms and this note. A real yes means a signed term sheet, not a kind word.
7. Fri 23 Oct (JY and Aiting) Go or no-go, on the three conditions above.
8. Tue 27 Oct Tender closes 5pm. The 780 USR signing window ends about now as well.
9. Nov - Dec 2026 Roll the 7 Nov DBS transfer as usual. If approved, the home loan arrives early to mid December and settles Standard Chartered and April DBS. If we won the CC, sign the friend loan and draw it in December. January dividend: repay Ben.

Appendix: loan by loan, and what to confirm

A. Rebuilding the balances from the Keep notes

Balances at February 2026 were given by JY; later balances are rolled forward at the stated payment. Where a payment includes interest, the principal falls more slowly than shown, so instalment balances are estimates to within about $10k. "Still to pay" is the sum of the remaining instalments including interest, which is what matters for cash.

B. Facility limits and what is usable

C. Checks on JY's summary figures

• "Net -38k a month": the lines he lists (+14k, -15k, -17k, -10k) add to -28k. Using the five loan payments as listed ($19.7k, not $17k) gives about -31k. This note uses -28k to -31k.
• "Monthly repayments 16-17k": UOB 6 + Citi 2 + DBS 6 + HSBC 2.7 + SC 3 = 19.7k. Perhaps the DBS or SC amounts are not paid every month. To confirm.
• "I can make about $800k a year": dividends $410k plus salary $180-240k gross = $590-650k. The $800k may be clinic profit before company tax, or include something not listed. To confirm; nothing in this note depends on it.
• "Monthly income with dividend 34 + 20 = 54k": $34k is right for the dividends averaged over a year; the salary is $20k gross, $14k net.
• "BT facilities 1,130k, taken 986k, left 82k": the $1,130k of limits reconciles; the $986k and $82k do not (detail gives about $653k owed to banks and about $179k usable). JY has said this line is out of date; it is not used.
• Dividends "Jun 25: 200k, Jan 26: 200k, Jun 26: 220k": the clinic-by-clinic lines add to $206k, $216k and $221k, so the last twelve months brought in about $437k. This note uses $410k a year, which is on the safe side by about $27k.

D. Numbers JY and Aiting need to confirm

• Current statement balance of each loan (the estimates above are rolled forward from February 2026).
• DBS: the Keep note says "60k taken 11/7/2025, full repayment 11/7/2026". Read as 11 July, that loan was due in July 2026 and must already have been repaid or rolled; read as 7 November, it is the "$60k due 7 Nov 2026" entry. This note assumes the second reading. Confirm with DBS which it is.
• Whether JY is within the MAS borrowing limit at DBS and Maybank (12 times the monthly income each bank has on file), and whether they will still offer a new balance transfer when the current ones end.
• Dividend payment months and amounts for 2027 (assumed January about $200k and June about $210k).
• Is "Ben" a friend loan, and what was agreed about repayment and any interest.
• Mortgage: exact balance, rate, remaining tenure, lock-in end date, and which bank.
• CPF used on the flat including accrued interest (CPF website), whether the flat is jointly owned, and the purchase date and price.
• JY's and Aiting's ages (for loan tenure), and whether Aiting currently draws any salary from any company.
• Cash in the bank today, and what part of the $10k monthly support goes to PFS versus Little Forest and TDA.
• The business: the CC deposit amount and timing from the site show; the signed franchise agreement for clause 4.10.

E. Assumptions made in this note

• Balance transfers roll at a 3% fee; the household keeps a $10k minimum balance; shortfalls come from the DBS and Maybank lines; starting cash is zero.
• Home equity loan at 3% over 25 years for the family's own cash flow; tested at 4% for the bank's debt test. Dividend income counted at 70%; balance transfers counted at 3% of the outstanding balance.
• The PFS part of the $10k monthly support is about $5k (its current run-rate loss) and stops once PFS is profitable; the Little Forest / TDA part continues unchanged.
• Business figures: PlayFacto Kovan only, before GST, Little Forest removed, $8.00 psf, no extra salary for JY or Aiting. Model: operations/relocation-plkcc-2026/model-2026-10-08; funding scripts: finance/funding-plkcc-2026 (funding_need.py, hq_package.py, personal_cashflow.py).
• Market facts (MAS loan rules and borrowing limit, equity loan formula, EC rules, convertible terms, Moneylenders Act, CPF rates) are carried over from the 8 Oct note and its sources, with the borrowing-limit and EC points checked against MAS's and the banks' own pages. Not legal or tax advice; a lawyer should draft the loan, and the broker and bank confirm every lending rule before anyone relies on it.

Prepared by the CFO desk for JY and Aiting. If a number here looks wrong, it probably is one of the estimates above; say so and it will be corrected.