A company loan in Singapore is a type of business financing that allows you to borrow money from financial institutions. You can use the money you receive from the bank to fund your business. It is a short-term loan to help get your business or start-up running.
It is beneficial borrowing option for small businesses because it is a financing option that does not need much paperwork. The loan also has simple repayment terms. Hence, businesses can use it to overcome their cash flow problems. It is most useful when they are in the start-up phase or need a cash infusion to advance their operations, such as buying new equipment or expanding into new markets.
A company loan in Singapore is usually not dependent on the income of the business owner(s), but it may be contingent on how much they have already invested in the company. Since a company loan is an unsecured loan, it is also sometimes possible for a business owner to get a company loan without any collateral at all. However, it depends on the money the business has earned previously (or how much value its assets hold). Also, you do not have to pay additional taxes on the money lent to you.
How Does a Company Loan in Singapore Work?
When you apply for a company loan, you need to fill out an application form and provide proof of your financial health, including your credit report and current income statement. Once approved by the lender, the moneylender will provide you with the necessary funds for your business needs.
Some lenders may even offer additional services like small business consulting or financial planning, while others may focus on providing funding through their company loan program.
Things to Consider While Applying for a Company Loan
If you are thinking about getting a company loan, here are things to consider:
What Can I Use It for?
You can use a company loan for anything related to your business — for example, buying equipment or inventory, paying off debt, hiring employees, or improving your office space.
Who Can Apply?
Anyone who wants to start up a new business or expand an existing one should consider applying for one of these loans.
A company loan does not only fund your business projects but also helps you build credit histories. It is ideal for someone who does not have much experience with credit before.
Tips to Get a Company Loan in Singapore
Getting a company loan may seem like a daunting task, but it can be easier with the below-mentioned tips.
1. Find Out If You Are Eligible for a Company Loan
Before you jump into getting a company loan, you need to make sure you are eligible. Your credit score and income level will play avital role in determining whether or not you will receive a company loan. Check your credit score before applying so that you will not get any unpleasant surprises when the time for approval comes.
2. Determine How Much Money You Need
It depends on what you are using the money for and how much money you have in reserves currently (your savings account).
Figure out how much money you need and how much interest rate should be attached by looking at similar loans on websites. It will help give you an idea of what kind of interest rate might be available for your specific situation since rates may vary widely depending on credit history, income level, and other co-dependent factors.
3. Find the Best Suitable Loan for Your Company
It is vital to know what type of company loan in Singapore suits your business best. There are many types of loans available in the market today, such as unsecured or secured loans. Find the one which suits your business needs better than others depending on your financial situation and other factors like your credit history and requirements for collateral.
Also, consider the type of loan you are looking for—a short-term or long-term loan? The type of loan you should apply for depends on whether or not your company has been in business for at least six months.
4. Find Licensed Lenders Who Offer Low Rates
Once you know what type of loan amount and terms will fit your budget, now comes the time to find lenders who offer low rates.
There are various licensed moneylenders in Singapore offering these services, so do some research on them and see which one suits your needs best by checking their terms and conditions. You can do this either by looking online or asking friends and family members who own businesses. If they have borrowed a company loan before, ask which lender they used and why they recommend them!
5. Get Your Finances in Order
Before applying for any loan, it is essential to look at your finances. Positive financial health impacts your loan amounts, interest rates, and repayment duration.
Things to Figure Out
Before you head out to borrow a company loan, here are a few things you should think about –
- Do you have enough cash in the bank? Are you able to pay off any other outstanding debts? If not, it might be time to take a hard look at your spending habits and try to cut back where necessary. It will make it easier for you to qualify for a loan in the first place.
- Get a good credit history for your company by paying off all your outstanding bills on time and not defaulting on loans or credit card payments.
- Make sure that your balance sheet is healthy, with enough assets to cover any liabilities you may have so that the moneylenders can easily assess the health of your business.
- Make sure all required documents are ready before applying. You will not get a loan if you do not have the required documents in place. Otherwise, it will consume more of your time later to arrange missing documents and reapply for the loan.
Banks are often hesitant to provide loans to small businesses. Also, your application may get stuck in red tape and take months to be approved. If you don’t want to deal with such issues, consider getting a company loan in Singapore from licensed moneylenders. They have seamless processes in place and are quick to approve your loan. Also, they are more open than banks to lend money for business expenses like equipment purchases or inventory.
Get a hassle-free company loan in Singapore at a licensed money lender in Singapore – OT Credit. Reach out to us today to apply for a loan at competitive interest rates.