There are purchases that business owners need but can’t afford. Whether they are pieces of equipment, a new branch building, or an official office, it will take a huge sum of money to get them. However, it is not entirely impossible to give up on these essentials. If you are in the business industry, then you must already know that loans are big business in the financial world. It is used by many people who cannot fund their essential purchases in a crucial moment of their business. For a loan to happen, there needs to be a lender and a receiver. When you put your feet in the shoes of a lender, you would know that they do not want to lend someone their money to someone without the promise and assurance of the receiver that they could give the money back to them. It is important to keep this in mind as you research working capital loans in Singapore because the way some loans are structured can be confusing that you will end up in large amounts of debt.
A way to avoid debt is to thoroughly assess your financial situation today and in the future. To assess, you must ask questions first. Thus, in this article, you will learn about the considerations you need to take into account in the form of asking questions to yourself or your business partners.
What are the business loan options available?
First and foremost, you must know that there are many options that you could choose from when you want to apply for a loan in Singapore. Remember that business loan is only an umbrella term. If you want to know the options, you might want to look into:
- SME working capital loan
If you are a small business or SME owner with a maximum of 200 employees, the SME working capital loan is what you should be looking for in money lending companies. In Singapore, the government works with banks to offer financing up to 1 million dollars per borrower that can be paid in 1 to 5 years.
- Temporary bridging loan
Over the COVID-19 crisis, the Singapore government has opened this business financing scheme to help all businesses. It is available to Singapore-registered companies that are at least 30% owned by locals. The loan amount can be up to 5 million dollars with a repayment period of up to 5 years!
- Debt consolidation plans
Lower interest rates are one of the major advantages of getting a debt consolidation loan. It helps you combine all your insecure credit facilities from different institutions into one single loan. It will help if you are struggling to keep track of your several business loan types, interest rates, and due dates. In this way, you get to simplify the debt repayment process!
Do I have a good credit history?
When you get a business loan while you have a fledgeling business can be quite tricky. Most lenders in Singapore will require your business to be around for at least half a year to qualify for any of their loan plans. It also applies even when you are already established in your industry. They will still ask for proof of your annual revenue to lend to you. Therefore, you must assess your credit background first to ensure that you have a high chance of getting that loan you need.
Should I consider a personal loan?
There is a chance that your application for your business loan could get rejected for various reasons, but it is not something that should discourage you. You still have the option to get a personal loan instead. A personal loan has more relaxed requirements, but it would differ when your loan cannot considerably be paid by your current salary. It is a loan that is best suited for salaried workers who are looking to start their small businesses.
Do I have the documents required to apply for a loan that I want?
Loan application could either be a long or short process depending on how you prepare all the needed documents. Researching for the best money lender in Singapore could take up a lot of your time. What you could do is find a reliable platform that organises the best ones in one website so that you can easily assess each lender’s qualifications for monthly installment loans, working capital loans, among other loan plans that they can offer. Usually, they will ask for your:
- Financial statements/reports
- Bank statements
- GST declaration
- Proof of company ownership
- Business plan
- Financial projections
- Information about any affiliated businesses
Am I ready for a business loan?
If you have not started your business yet, you cannot get a business loan. Even if you are aiming for a startup business loan, you will need to be registered as an operational business for at least six months to qualify for it. Remember that committing to a business means you have to make sacrifices, emotionally and financially. You can choose to register your business and start your operations for a small period of six months before you attempt to apply for a small business loan.
If you don’t want to sacrifice your life savings on a business plan that you think will be successful, you must ensure that your operations are functional enough to repay the monthly installments in due time. Otherwise, you need to pay the loan out of your bank account.
Finding the right money lender
TT Media is one of a kind platform that is dedicated to bringing you the best money lenders and financing companies for your loans and other monetary needs! Their list of trustworthy lenders will save your time and money in the searching process of a reliable provider of monthly installment loans.