Business loans can be a good source of money to help you run and grow your business. This type of loan can be used in the purchase of business machinery, new premises, finance your company or for paying your employees bonuses and salary.
When applying for a business loan from licensed money lenders in Singapore, it is important that you have a clear outline of how you plan to use the money once your loan has been approved. By so doing, your money lender will be able to get a clear picture of how you intend to use the borrowed money.
When a bank has turned your loan request, you may get worried that this spells the end of your business. There are numerous business owners in Singapore who unaware of the concept of Singapore’s private lending companies. They miss this helpful option because of the misconceptions floating around. When you are in urgent need of funding for your business, but you are not sure about of how you can get your business loan accepted.
The below pointers will help you clear some of the doubts you may be having. Read through the points below to identify whether some of the mentioned ones may be preventing you from getting a business loan from legal moneylenders.
Only Banks Offer Business Loans
Under normal circumstances, most SME in Singapore usually turns to banks as well as other similar money lending institutions for money. This could be the custom in the industry you are in, however, rest assured there are many other options for you that are worth exploring.
Besides the banking institutions, licensed private moneylenders also offer working business loans to borrowers. These moneylenders also do so with little paperwork attached to the loan application process. Once you have presented all the necessary documents, you will be able to access your loan money within a week.
Of importance is you take time to shop around for the right business loan for your business. Compare interest rates offered by various licensed moneylenders in Singapore before settling for one lender. And always make sure you read and understand the loan contract before signing. Also, make inquiries about any charges that you might incur in case of late and early payment and any other charges included during the loan processing.
A Perfect Credit Score Is Needed To Have The Business Loan Approved
Having poor credit scores can create an obstacle when you are seeking to raise money from banking institutions or through government-issued grants. A lot of Singaporean licensed money lenders will on many occasions approves your loan even when you have a bad credit score. This is provided that you are able to satisfy a number of business loan requirements.
Some of these requirements range from business size, annual profits and revenue, type of industry, business age and cash flow. Therefore other factors are considered by moneylenders besides your credit score making them a reliable option for your business loan needs. So do not hesitate to contact your nearest licensed moneylender to see what they are able to work out for you and help you meet your financial business requirements.
Lenders Prefer Giving Large Company Loans Than SME Loans
Although legal moneylenders in Singapore do profit from working with huge advances and long-term loans types, they work and are open to doing business with different types of establishments available in Singapore both small and large. Therefore do not allow this misconception stop you from looking for SME funding from them.
Look at Focusing instead on the cash flow as well as your ability to pay off the debt for you to know the amount of loan money you have to borrow. You can seek financial advice from the moneylenders to help you know the best loan type for your business they may have for you. Even then they are ready to support you on your journey as you grow your business.
All Private Moneylenders Are Scammers
Although well-meaning some well-wishers could advise you on getting your business funds from banks only, while your company stagnates and suffers from lacking a much-needed financial boost. However you should not let past, bad loan experiences cloud your perceptions of getting private funding. Once you decide to work with moneylenders in Singapore, choose reliable and the licensed lenders over the unlicensed hacks. Licensed moneylenders follow the right business practices and are professional. Through them, you are able to get your business loans under reasonable terms as well as on time.
Focus Only On Interest Rates
There are individuals who solely apply for loans based on the loan’s interest rates. Even then you are not the only one who makes such a crucial lending mistake. Although you need to choose lower interest rate loan, it is important that you consider other aspects of a loan as well. These may include processing fees, loan amount, monthly instalments, tenor, penalties on missed and delayed payments, prepayment charges, hidden charges, and loan extension plans.
Unsecured Loans Have Strict Payment Plans
The long-established bank loans often come with fixed loan tenures as well as EMI rates. Using the bank loans you will be repaying the money on a set schedule, regardless of how your business is doing. This can be challenging for a small-scale business or if you produce seasonal goods since your business has its flows and ebbs. This can greatly affect your ability to repay and it puts a strain on the finances. However, working with a licensed moneylender, you will be able to get a flexible repayment plan and loan tenures based on your business needs. Therefore choose short-term loans for passing cash needs.
It’s Hard Getting Funding For Startup Businesses
Most small businesses in Singapore, unfortunately, believe this myth. Business partners and Individuals miss out on chances of turning their ideas into reality as well as expanding their growing enterprise. Some licensed moneylenders give loans to startup businesses and may well fund your advertising campaigns. These loans will range from the short-term SME loans to the start-up loans for the salaried, self-employed and contract individuals.