It is a common misconception that business loans should be taken only from banks. With the increasing regulation of licensed money lending in Singapore, newer sources of credit are emerging. If you’re in immediate need of some money for an investment or a business venture, a moneylender can provide a quick loan. Instead of heeding vague and misleading advice on the internet, consult a financial expert. Here’s debunking some common business loan myths.

Myth 1: Approval is a long process

The reason behind a business loan could be an immediate requirement for capital for a business idea. One could also need cash to cover unforeseen expenses. No matter what the reason, one needs quick money. Banks have a stringent screening process, but, with a licensed moneylender, the approval is fast. Banks generally approve an application in two days and moneylenders generally give you the required cash in a few hours.

Myth 2: Upcoming businesses can’t qualify

Bright entrepreneurs often get taken in by the misconception that new businesses cannot business loans. However, this isn’t the truth. Instead of turning to crowd funding platforms or venture capitals, you can get easy loans from moneylenders.

Start-up loans are increasingly getting popular with young entrepreneurs. Moneylenders have flexible terms of repayment and getting small cash is easy. The difference between start-up loans and business loans from moneylenders is that the latter doesn’t scrutinize your personal finances.

Myth 3: Private moneylenders are cheats with high rates of interest

Nothing can be far from the truth. Unless you’re borrowing your money from unlicensed loan sharks, moneylenders are a safe source of credit. Another myth is that online lending is dangerous and usually involves exorbitant rates of interest.

Moneylenders provide legal business loans to businesses of all sizes and even foreigners with valid employment license. The interest rates are not as high as they are made out to be.

Myth 4: A good credit score is mandatory

This is mostly true in the case of financial institutions like banks. However, this is another area where alternative financing trumps traditional sources. A licensed lender will need common documents but won’t be concerned with your credit rating. As a young entrepreneur, you may not necessarily have a good credit score. Even if you’re looking to consolidate all your debts for a better credit rating, you can borrow the money from a moneylender.

Myth 5: Business loans can be used for any purpose

Any lender needs assurance that can repay their money. This is why it is important to specify the reason for the loan. Determine how much you would need and where it will go. Some financial institutions may even penalize you if the loan is being used for undisclosed purposes. Being clear about your goals will also help build credibility with your lender.

Myth 6: You may borrow as much as you want

Your business could be in a position where you borrow more than what you need. You might be tempted to borrow more, but it is unwise to burden yourself with extra debt. You would need to pay interest on money you don’t require. If you think you might need that extra money for other purposes, borrow small cash from a moneylender.

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