3 Tips to Building Your Company With a Business Loan in Singapore
In business, cash is king. You need a steady flow of it to run your company’s day-to-day operations, buy new equipment, or market your brand. If a lack of funds is stopping you from starting, running, or expanding your business, then it might be time to take out a business loan. But how do you pick the best one for your company?
Getting a small business loan is not a difficult process, but you have to know what you’re doing. Since the global economic meltdown in the early days of the 2000s, many businesses have faced various issues with financing. The most common one is higher loan interest rates.
However, business loans have started making a comeback in Singapore. But before rushing out to your local bank, you have to ask yourself some tough questions: are you eligible for a business loan? What should you know before applying for one? And – most importantly – how can you do to make sure you get an approval for one? Here are 3 tips to help you build your company with a business loan:
- Choose the Right Loan Type for You
The right loan type for your business will depend on what you need the financing for. If you’re looking for capital to start your business, it is virtually impossible to get a loan in the company’s first year. Lenders typically require evidence of steady cash flow to prove that you’ll be able to repay the loan. It might be a good idea to look for other sources of capital in this case.
Businesses that are already in operation have more financing options. These include SBA loans, business lines of credit, term loans, and invoice factoring. Do your research to find the best loan type for your business.
- Find the Right Lender
You can get small business loans from a number of different sources. These include banks, non-profit microlenders, and online lenders. Each offers various products that are tailored to certain operational needs such as lines of credit, term loans, and accounts receivable financing. Again, your choice of lender will depend on which option has the best loan products and terms for your business.
The best business loan in Singapore is the one that offers the lowest annual interest rates. As long as you can handle the regular repayment plan, this is the perfect choice for any small business.
- Get your Documents in Order Early
As a business owner, you should plan ahead and manage your company’s working capital cash flow efficiently in case you’ll need financing somewhere down the line. It is also important to know your CBS credit score, as well as your current and projected cash flow estimates. This will help you determine if you meet the lender’s minimum annual revenue and can repay the loan.
Once you’re ready to apply for your loan, it’s time to submit your documents. It is simply good practice to keep your records and business documentation safely. If you’ve done this, then this part should be pretty easy for you.
Most lenders will require that you submit a number of these documents with your application. Depending on the lender, they might ask for your business and personal bank statements, tax returns, financial statements, and legal documents for your business.