If you are running a small business, it is inevitable that you seek some form of financing to help it to grow. One of the ways to get the funds for your venture is to secure a business loan. You may apply for a loan from a financial institution such as a bank or credit union, but what will be the most beneficial? The problem is that new entrepreneurs may not know how to go about finding a loan that will work well for their goals. In this article, we delve into how to secure a Business Loan in Singapore.
- Filling loan application forms
The first thing you will need to do is to determine the amount of money that your business requires to give it a leap. You must also have reasons why you are seeking for finances. Typically, business loans can be used for expansion or for inventory acquisition. In some cases, you may seek a business loan to buy assets. An asset like a business car is essential since it will make the business more efficient. These reasons must be indicated in the forms.
- Review of the application
Depending on the institution and the nature of the business, you may need some advice. So, the institution may decide to send its officers to your premises. They will review your business and offer you general advice on how best to run it. In some cases, they will offer you advice on how to use the money once it is disbursed.
- Credit report
Business credit history will be evaluated. But, in the case of a start-up, or a business that is less than 3 years, a personal history may need to be evaluated. It means that an entrepreneur must get their personal credit history in order first. Once they have done that, they can then contemplate seeking a business loan. You may get your credit history from any of the credit reporting agencies in Singapore and review it. You will identify the errors that may make it difficult for you to secure the loan. Also, you need to check your credit score before you make the next move. Typically, a credit score of anything around 700 is good. It increases the chances of your loan being approved.
- Business evaluation
The financial institution may want to sit you down to evaluate your application. The idea is to work out the amount of money that can help you maximize the profit. It also helps them determine the amount of money you can manage and afford to pay. They use this information to calculate the interest and the period you need to pay the loan.
- Signing the agreement
If the lender is happy with your business plan and you are satisfied with the terms of the loan, you will need to sign an agreement. The financial institution prepares the agreement statement with all the details required. It captures the amount of business loan that has been approved and the terms. The agreement is then signed in the presence of a commissioner of oaths.
Once everything is done, it is up to the institution to decide when to disburse the funds. Some will do it within 24 hours while others will have the funds available in the 2-3 working day.