The main purpose of any business loan is to increase revenue as well as achieving a competitive edge. When you are in need of funding, but you are uncertain about how to go about getting your business loan approved in Singapore, this guide can help you clear all your doubts.
Often at times, you will need a business loan to help you purchase new equipment or even for clearing any pending purchase payables. It can, however, happen that when the banks reject your loan request, you may worry that your business will shut down.
It is important for you to realize that business loans are an excellent source of funding that will help you operate and grow your business. This loan type may be used for the purchases of business machinery, financing your company, new premises, or for paying the employees salary and bonuses.
For this reason when you decide to apply for business loan issued by the licensed moneylenders in Singapore, its imperative that you are clear on how you will use the money soon as the loan is approved
An additional advantage of a business loan is avoiding the danger of seasonality. Lots of businesses bring in the most profits during the holidays season or in summer. This means that they have to purchase more inventories as well as advertising discounts well in advance. These investments may seem hazardous, but, considering that they have to be made during the low-season when the sales are often down.
A business loan can also help you increase revenue through accepting expensive yet profitable projects that, the lack of a business loan’s help, might tie up a lot of your working capital, which would make it hard for you to run your business.
Many business owners unaware to the idea of private lending thus forgo this important option because of the misconceptions that are floating around.
It can happen that one of the below-listed myths is stopping you from going for a business loan issued by licensed moneylenders. Keep reading to identify those that might be preventing you from growing your business.
Focusing Mainly On The Interest Rates Offered
Always try to look at other factors other than the rates of interest offered on the business loan you would like to take out. Although you are not the only one who makes this crucial mistake, you, however, need to remember that you need to look at other aspects aside from the lower interest rate being offered.
These should include the loan amount, processing fees, tenure, hidden charges, monthly instalments, penalties on missed and delayed payments, prepayment charges, as well as loan extension plans.
It’s Not Easy to Get Money for New Businesses
A lot of small businesses happen that they believe this myth. Partners and individuals miss out on crucial opportunities of turning their idea into a reality or even to grow their fledgeling venture. a number of Singapore’s licensed moneylenders do offer loans to help set up businesses and also fund the marketing campaigns you would like to run.
These ventures may range from start-up loan to short-term SME loans for the salaried individuals, self-employed as well as contracted individuals as well.
To Approve Business Loan You Require The Perfect Credit Rating
For some individuals, poor credit ratings might pose an obstacle for raising money from lenders or even through the government offered grants. A good number of Singaporean moneylenders will approve a business loan even when it happens you have a less than ideal credit score, given that you meet the required business loan necessities.
The provisions of the loan range from yearly revenue along with profits, cash flow, business size, business age and the nature of industry you are in.
Each Licensed Lenders Are Scammers
Some misinformed well-meaning friends and family may recommend that you stick to business financing from banking institutions or nothing, even when your company is suffering or even stagnates from the lack of funds. Do not let previous and bad lending experiences cloud your view of private funding.
Always choose trustworthy certified money lenders over the unlicensed hacks. The earlier is a professional and also follows principled business practices. This also means that you will get credit on schedule and under affordable terms.
Lenders Favor Larger Company Loan Compared To Small Business Loans
Although certified moneylenders hardly get profits from large advances or even the loans that are for long periods, most of them are ready to work with all kinds of establishments – both small as well as large. Even then do not let this myth prevent you from seeking SME financing offered by legal money lenders in Singapore.
In its place, you will need to focus on the cash flow and your capability to pay off for you to be able to make out the amount of money you will need to borrow.
Unsecured Loans Come With Rigid Payment Schemes
The traditional bank loans usually have fixed loan tenures plus EMI rates. Thus you will repay money based on a fixed schedule, not considering how the business is performing. When you have a small-scale company or your company produces seasonal goods, and that your company has flows and recede. This, in the end, affects your capacity to pay and it may also put strains on your finances.
With the private lending option, you will get reasonable repayment plan or even tenure plans depending on the business needs. Of importance make sure that you pick short-term credit for all the transitory cash needs.
Banks Are The Single Source Of Financial Support
Traditionally SMEs in Singapore often turn to banking institutions and other similar financial organization for their funding needs. Even though this might be the custom in your chosen industry, however, you can rest assured that there are many other funding options that are worth exploring.
Licensed private moneylenders in Singapore also offer working capital loans, and on many occasions without the tedious paperwork. With this in mind, you could get your funds approved under a week in many instances.