Before we get into the topic of how to get a business loan in Singapore, let us first analyze what business loan is and what are the benefits of it. Many young entrepreneurs face the difficulty of a lack of money for starting a venture. They don’t have the desired amount of capital needed for starting a venture. In these case scenarios, business loans act as much of a relief to them.
Business Loans are some sort of finances provided to you by banks or even private individuals for the starting or growing of your finances. Often we face the difficulty of buying machinery, or increasing capital production or improvising on some of the new techniques because of lack of capital. In these cases, we can avail of business loans from prestigious companies like Capitall SG. Banks charge interest rates on the loan to the individuals or companies. The individuals or the business aren’t required to pledge in their assets. This acts as a major boost to them.
For new startups, banks provide them business loans at a much cheaper rate of interest because, in case of default of payment, the company can be liquidated to pay off the dues.
To apply for business loan Singapore, you are required to fulfill certain criteria’s including:
- Credit Score- Since banks or private individuals don’t ask for your assets, they require knowing what your credit score is. Having a high credit score would make it easy for you to avail loans at lower rates of interest. Some institutional lenders might want to know the financial strength of the company. Credit scores in Singapore are rated from the range of AA-HH. It means that having a credit score from AA-CC would increase your chances of availing the loans. However, that doesn’t mean that if your credit score is below CC, you won’t get a business loan. Banks or private individuals might ask for collateral instead of the loan.
- Existence- In today’s time, starting a business of your own has many risks. More than 50% of the startups are struggling to either create employment or growth of the company. In these cases, the existence of the company becomes important. The longer the company has been operating in Singapore, the more stable it is. A company operating in Singapore for over 2 years can be considered well enough for a business loan. However, if the company has been struggling in its 1st year, then they have decreased chances of getting a loan.
- Annual Revenue- The loan amount that the company or individual would be asking for largely depends on their annual revenue. Companies having annual revenue of over $300,000 have an increased chance of getting the loans. Banks offer you a loan only till the amount they think the company or the individual can repay. If they start offering loans of huge amounts, then there are many risks associated with it.
One should analyze the exact amount of loan that will be required to them. Choose from whether you require a short term loan or a long term loan. Read all the information carefully. There are various banks and lenders ready to provide you business loans. Look for the best one which asks for a lower interest rate. Know where you require the loan amount for. Whether you need it in the management, operations, sales or purchase department.
Choosing the right kind of loan is essential. In case a person chooses short term loan instead of a long term loan, there might be difficulties in the later stage of operations. As a result of which the company might go into liquidation. Capitall SG is one such organization that offers loans to people or companies at attractive rates of interest. Over the years this company has been able to provide solutions regarding the capital problems faced by companies or individuals. Banks require certain documents so that you can avail of the business loans.
The documents include:
- Previous Years Bank Account Statements
- Profit and Loss Statements
- Balance Sheets
- Income Tax Returns
- Identification proof of directors
Usually, paperwork takes up a lot of days. Having all the documents readily available will not reduce the period but also speed up the process significantly. Banks always look for companies that agree with their terms & conditions and provide all the documents whenever asked for. Thus always be prompt with it. The director or the shareholder of the company must provide a written guarantee to avail of the loan. Also, they must be a resident of Singapore. Business loan Singapore can be repaid within one to four years. It takes about 3 to 10 working days to get the loan approval. One can expect an interest rate of approximately 3.7% flat per annum for micro or small loans.