Cash is king in business. You need it for day-to-day operations, marketing, buying new equipment, or renovating your office building. If lack of fund holds you back from starting, running or expanding your business, you can consider taking a business loan. But wait, are you eligible for a business loan? How can you get approval for one? What are the things I should consider and know before taking the loan from a licensed money lender? Here are some useful tips on how to get a business loan in Singapore.
The age of your business is an important clue for the lender. Ideally, your company should be at least six months old. The older, the better. This is because more years in the business shows your stability. It is also a sign that your business is financially well-to-do. So consider running a business for more than six months, before applying for a business loan in Singapore. However, you can also apply for a startup loan – in which case, you do not need to have an established business. All you need is a good business plan and knowledge and experience in the relevant field.
To increase your chances of getting a business loan in Singapore, you should make sure your company’s bank account is active and has a healthy transaction record. Money coming and going from your company’s bank account is a telltale sign that your business is operational and there is a good chance that such a business will be able to repay a loan.
This is another very important factor to consider. Banks or moneylenders usually check with the Credit Bureau Singapore (CBS) to know about your credit history and current outstanding loans. As a business owner, you should maintain a good credit rating for your business. This will make it easy for you to get approval for a business loan when you actually need it. The lender usually checks whether you have a good repayment history and the total amount loan you currently have.
Bounced checks are a red flag. If your moneylender comes to know that you have a history of more than three bounced checks in the past six months, they may be skeptical about your loan repayment capability. Sometimes returned checks are a result of poor planning. For instance, you could issue a check at an unnecessarily earlier date, without checking your bank balance. This type of mistake can be avoided with a little planning.
Whether your loan application will be approved depends on whether you’re seeking the loan from a bank or a licensed moneylender. Contrary to a common misconception, the latter offers customised business loans at a low rate of interest. Borrowing from licensed moneylenders is also fast and convenient. All you need is to fill out an application form and submit all the necessary documents. A loan consultant will talk to you and quickly gain insight into you exact requirements. Then the consultant will recommend you some of the best loan solutions.