What are Business Loans?
Business loans are the one issued to businesses e.g. startups, SMEs and MNCs to provide funding for expansion, expenses, and other business purposes. As such the business can stay afloat and continue to grow.
Business loans in Singapore are offered by both banks and licensed moneylenders. Each of the moneylenders have varying business loans, interests, and criteria.
Major Reasons Why Business Owners take Business Loans
Singapore has a promising economy and the reason why it is a good business hub. It is also hailed as one of the top business-friendly countries. It is not surprising that start-ups and SMEs continue to grow. But as their operations continue, there are a lot of challenges that may face and among the biggest issue that they face is the lack of funds.
Startups and SMEs are having a hard time when getting funds in the banks because of their length of tenure in the industry. And, this is the reason why securing a loan from licensed moneylenders is an advantage to them. These are among the common reasons why they are taking loans from legal lenders:
- Expansion. As soon as businesses continue to make a profit and the products or services are on-demand, it is now the right time for expansion. To plan for an expansion calls for a huge sum of cash. The current cash on hand is not enough to pursue this plan and this is where business loans come in. If you are planning for a business expansion, it now time to design your plan and apply for a business loan.
- Inventory Purchase. Securing a business loan is also ideal if you have a business selling seasonal or retail items. You have to make sure that your stocks will not run out for the incoming season. A business loan can help you add more inventory in order that you can meet the demand. You don’t need to worry to pay it immediately, you can pay it after you have earned enough from selling those seasonal items. This is also ideal for firms where they receive full payment after they finished a project like contractors. They would usually run out of money to purchase the materials and business loans can help in buying those materials. They can pay the loan after they have completed the project.
- Increase Working Capital. Working capital is needed to ensure that the business daily operations continue. Sometimes, cash flow shortages do happen especially if you are new in the industry or starting. Your profits are not enough to answer the shortages like you have unpaid bills and debts. Increase your business capital with business loans is ideal to make sure that business operations will continue. You can pay the loan as soon as your receivables were collected.
- Credit Score Improvement. You can start borrowing for a smaller amount from moneylenders. By being a responsible borrower, you will soon be entitled to bigger amounts. If you have a huge business plan in the future, it is essential that you have established a good credit profile. Moneylenders can help you establish that credit history as long as you are responsible. Most of the moneylenders have flexible repayment plans which are easy to be repaid. It is advisable that you start taking some short-term loans.
- Capitalize on Good Business Opportunities. There might be times that there will be a huge discount on equipment that is needed on your current operation and you lack some funds. A business loan can help you not to miss a good business opportunity. Also, there might be also some other good opportunities e.g. business partnership, discounts on properties and many others. Getting a business loan can help you capture those opportunities. Just take in mind that before investing, you need to weigh the advantages and disadvantages.
What are the types of Business Loans in Singapore?
In Singapore, there are various types of business loans that can be avail. It will depend on the business owner’s plan and goals.
- Unsecured Business Term Loan. One of the common types of business loan which is ideal when you wanted to increase your working capital. You can secure this business loan to purchase assets that can help you to increase your profit. This loan is ideal for SMEs since repayment can be extended up to 36 months. And this is easy to avail from licensed moneylenders since this is an unsecured one. The loanable amount can start from $1,000 up to a maximum of $100,000.
- SME Micro Loans. To help SMEs manage and sustain their daily operation, SME Micro Loan is offered. This is a government-assisted financing scheme specifically made for small and medium enterprises. SMEs can get up to $100,000 financing repayable for up to 4 years. To qualify an SME must have annual revenue less than $1,000,000.
- SME Working Capital Loan. Just like SME Micro Loan, this working capital loan is also a government-assisted funding which is under the Enterprise Financing Scheme. This was announced after the Budget 2020. It allows qualified SMEs to access this funding until March 2021. With the Enhanced SME Working Capital loan, eligible SMEs can access up to $1,000,000 working capital. It can further supplement SMEs growth. This is repayable for up to 5 years.
- Trade Financing. This type of financing is ideal for businesses which involves in the manufacturing of goods and trade products. It will help in financing the purchase of materials and inventories. This is usually offered in the form of guarantees to suppliers.
- Property Loan. Properties can be used as a guarantee or collateral to secure a working capital. This can be used to purchase industrial or commercial properties. This a secured loan where the interest rate is low and known as one of the cheapest loans available.
- Equipment Financing. To help SMEs to upgrade their equipment or purchase new equipment, equipment financing is offered. This is vital to help SMEs increase their productivity in production and will ensure smooth business flow.
- Invoice Financing/Receivables Financing. Sometimes a customer may pay at an unpredictable time this is why invoice financing is offered. Some licensed moneylenders provide cash in exchange for these outstanding invoices and this is known as invoice or receivables financing.
Advantages of Getting a Business Loan from Licensed Moneylender
There are various benefits a business owner can get when taking a business loan from a licensed moneylender.
- Easy Qualification. Unlike banks where you need to have stability in the business or have longer years, you can apply even at least 6 months in the business with licensed moneylenders. It is simply easy to qualify.
- Easy Application. Nowadays, licensed moneylenders utilise online platforms for application. The business owner will just fill in the necessary information within their online form.
- Fast Approval. Licensed Moneylenders are popular for offering fast business loans. You can get your business capital as soon as you need it. As long as you completed the documents, the loan can be released immediately. You can even get it within the day.
- Custom and Flexible Loan Term. In order that a payment term will work well in your business, licensed moneylenders create a custom plan. They can offer flexibility to support your business financing and growth. In addition, there might be tough times and lenders understand this. You’ll just need to talk to them for a restructuring plan.
- Well-Regulated Moneylending Industry. Licensed moneylenders ensure safe transactions. They follow strict rules and regulations. They are regulated by the Registry of Moneylenders under the Ministry of Law. Each month each moneylender is reviewed to check for scam or unfair practices since those who violated are subject to license suspension and even termination. And, this is the reason why the Registry of Moneylenders have an updated list each month.
How to Apply for a Business Loan?
When you need fast cash for your business cash flow concerns, it is now the right time to apply. You can avail wide-variety of short-term business loans. To apply, all you need to do is go to the website of your chosen moneylender and use their application form. Fill in the online form with the required information.
You can also approach the moneylender if you have some questions.
What are the requirements needed?
Be sure to have these documents ready before you send in your application:
- Current ACRA printout
- Tenancy contract
- Local firm or incorporated corporation
- NRIC/ID/ Work pass and Passport of your company’s shareholders and directors
- Latest (3 to 6 months) copy of corporate bank account statements
- Last 2 years P&L statement
- Proof of assets or title deeds
How can Cash Lender help you with business loans?
We understand that you are currently facing financial difficulties and we want to help you. We observed that searching for over a hundred of moneylenders can be exhausting and we don’t want to add that burden to you. We want to make it easy for you to access the right moneylender that can answer your business needs. We will provide instant business loan quotes in a quick and easy manner. You can gain the following advantages:
- Easy Online Platform. We use an online form that is easy to fill-in. You just have to fill-in the form with preliminary information. We will use this information to match you with the best moneylender and provide you with the best SME business loan quotes.
- Fast Results. Save time from searching and comparing of business loan overs from over hundreds of moneylenders. We will get back to immediately and provide a fast cash business loan. You’ll just need to apply to this moneylender.
- Safe and Trustworthy. The information that you have submitted are always safe with us. We will never disclose. We will just use it as basis in finding the best moneylender that will match your capital needs.
Aside from finding for the best personal loans and payday loans, we will be the one to scout for the most reliable money lender for your capital funding needs.
If you are now ready to get a business loan and want to save your time from searching and comparing for the best business loan, get started by using our online form.