Starting a small business would not be a hassle if you were having adequate finances at your hand. Any business would require money for maintenance. However, you might not be able to invest a huge amount initially in your small business. What would you do in such an instance? It would be vital for you to look for the best sme loan Singapore to meet your small business requirements.
How to seek a small business loan
Seeking a small business loan could be very easy if you know how to apply and where to look. Several different places would be made available if you were to look for a small business loan. However, the most common option would be the local bank. It would be worth mentioning here that they might not offer and approve loans to everyone. Therefore, ensure you do adequate research before applying for a small business loan.
Foremost, consider taking time to understand the criteria for banks who have been giving the loan. Different banks would have different requirements. Therefore, ensure that you adhere to those requirements before applying. A majority of banks would need you to have a decent credit score. They would offer loans to new businesses having a strong business plan with predictions for profits and expenditure. In case, you have a business running for more than two years, your chances of seeking approval for the loan would be relatively higher.
Is hire purchase a good way to buy a car? Rest assured that it would be your best bet to purchase a car using the hire-purchase option. It would be easy on your pocket. You would be given monthly repayment and transfer of ownership to you once the term ends and all funds have been repaid.
You would also be given options despite having a low credit score or if you were new in the business. You would have a higher chance of seeking approval from the banks offering secured loans. It implies that you would be required to provide adequate security for the loan. The higher interest rates of such type of loan would mean that you should take some time to compare various business loans available in the market.
How much loan can SMEs receive from the bank?
Business loans would be offered to a company for business purposes. You would come across several types of business loans. Most business loans would be offered for all kinds of business needs that you might have, while others would be offered particularly to meet your specific business needs. The most common types have been covered below –
- Business loan
The unsecured standard business loan would be given for up to five years. It would be dependent on the years your business has been around and how much revenue you generate.
- SME Working Capital Loan
The Singapore government works with the bank to offer financing up to one million dollars per borrower. This working capital loan has to be repaid within one to five years.
- Startup business loan
Popular with the businesses as the first business loan, this small version of the regular business loan would offer an amount of nearly $100,000. It would be relatively easier to get a startup business loan, as you would require being operational for a few months and do not require a strong financial history to borrow.
- Temporary Bridging Loan
It would help all businesses and not specifically SMEs. The loan amount sanctioned would be up to five million dollars for up to five years.
You might wonder how long does it take to get a bridge loan in Singapore. Rest assured that it could take up to five days for a bridge loan to be approved by the lender. In complicated situations, the duration to obtain approval for the loan might take longer than five days.