As you plan to build your business, it’s almost impossible you won’t apply for a loan. As hopeful as you can be that you will get financing, one thing that instantly crushes your dream is – loan rejection. This is something that over 80% of businesses in Singapore experience, and this could be you some time.
What if you can be among the 20% whose loan applications go through? Relieving, right? You need to be on the right track by following the tips we give you when applying for a company loan in Singapore!
Want a Company Loan in Singapore? Check Out the Following Insights for Easy Loan Approval!
To get the loan amount you need for your business, follow the following steps:
1. Maintain an Outstanding Credit Rating
One thing your lender will surely look at before approving your loan is your credit score. It’s pretty straightforward; if you have an incredible credit score, the loan application process is smooth! Once you apply for the loan, receiving the amount is just a matter of time.
A good credit standing means that you should pay all your bills, avoid bankruptcy, and not apply for multiple loans at once. These are some of the factors that Singapore banks will check before granting you a loan. If everything is in check, you will secure your company loan.
When the score is terrible, you will have to wait longer before the funds are released. You might as well be unable to fund your firm as it commences operations.
2. Ensure the Timing is Right
You cannot apply for a company loan at any given point in time. There is an ideal time where you will solicit for it and get feedback; otherwise, nothing will go through.
So when exactly can you get a company loan in Singapore?
It’s when your business is doing well. Usually, the first few months of a company starting up are the hardest. You are trying to do what you can to stabilize it. Over 20% of startups fail within the first year of operation for various reasons. Therefore, getting a loan within this time can be challenging.
Do not ask for a loan when your company is less than 12 months old. It’s too early to do this since your lender requires a track record and proof that your business has stable revenues to grant the loan.
So wait until your business is doing well to get support. Consequently, secure the funds early even when you don’t use them at the moment. You can use them when the tough time comes.
3. Have Current and Upcoming Projects Primed
What does your business prospectus look like? Do you have one? Most businesses ignore this essential aspect forgetting that it’s what most banks will look at before giving them loans.
You should prove to the lenders that you have viable projects and have other upcoming projects in the pipeline. Also, these outlines show that your company is generating income and is doing well. The projects are a sign that your company can stand independently in the coming days.
No one will lend money to a corporation that’s fumbling. Grantors want to work with a business that they are sure will repay the debt within the stipulated time.
However, you can beat this by proving an effective business plan to those lending you money—a powerful layout signal to financial institutions that your business is legit.
Therefore, provide evidence that what your company is doing will make enough to repay the amount. Similarly, explain to the banks how you will utilize their funds for quick application approval.
4. Get the Right Loan for the Right Reasons
Before contacting your money lender, get the reasons for your company loan right. Most shylocks for company loans in Singapore want to know what you want and why you want the loan. There are multiple selections available for Singapore companies, so you need to check what works best for you at the time.
Your primary aim should be to get the best loan you will not have trouble with while paying. Also, it should be able to cater to what your company requires. In fact, you will definitely get what you want from your banker.
They will stipulate the maximum amount you can get, the applicable interest rates, collateral, repayment terms, and any other helpful information. Scrutinize your options and settle for the one that suits you best. Also, do not forget to get loans with favorable repayment terms.
5. Pledge a Collateral
Another tip for soliciting company loans in Singapore is getting an indemnity. The first thing that comes to the bank question when lending a certain amount is, will you be able to repay it? If not, how will they recover the loan?
The granters want to ensure that their funds are safe even after you cannot pay them. This pushes them to ask for some “security” and reassurance that you will repay the loan they dish out.
While giving the collateral, most banks will want actual proof of the item. So, they will go through your balance sheet and the statement of cash flows. They determine your fund’s consistency and comprehend the company’s financial strength.
Also, the surety document highlights your personal and business assets. It will show the number of properties, cash, and receivables used as security.
By ascertaining such items, they will know whether the collateral you put in place will be enough to cover the risk in case of loan default. If not, can it be enough for half the risk? If satisfied, they will disburse the money. Otherwise, the requisition won’t happen.
Tip: When skeptical about getting a loan, consult someone with a greater understanding of getting company loans in Singapore. You save time since they will quickly show you the direction to follow and advise you for better chances to secure credit.
Obtaining a company loan in Singapore is not complicated, provided you follow the proper steps. If you want to fund your business, look for a fuss-free company that will listen to your needs and fulfills your desires. Talk to SU Credit for a simple and quick loan application process.