It’s no secret that every business needs money in order to grow. The more you’re capable of putting into the business, the more it can potentially reward you in return. It’s a simple formula that isn’t so simple to execute, as not everyone has the means to supply the business with the potential cash flow. That’s why banks offer the option for businesses to apply for loans, as they’re aware of the need for cash to succeed. This article will talk about the things you need to know/have so that you can apply for those loans and get accepted in Singapore.
Here Are 7 Essentials You Need To Know/Have To Get A Business Loan In Singapore:
1. Determine The Reason(s) Behind Needing The Loan
If you’re thinking of applying for a loan for your business, you probably already thought of why you’d need one in the first place. Being extremely clear on why you need to get a loan for your business is essential to determine what you’re going to do with it and how it’s going to achieve results for your business. Once you have that set in stone, you’re free to proceed to the next step of planning the exact details behind everything that’s about to happen.
2. Have A Detailed Business Plan
Having the main idea already in mind, you need to plan out the precise details of where your business is heading, what type of margins you’re looking at in the future and what methods you’re going to implement in order to see results in the foreseeable future. A bank will ask for this business plan if you’re applying for a business loan, especially if it’s for a start-up. Making the plan as detailed and accurate as possible will only help you on your journey to get the loan you need.
3. Keep Track Of Your Finances
To determine whether or not you’re eligible to get a loan for your business, you need to gain the trust of the bank you’re applying to. There’s no better way to gain that trust than showing them that you keep a very accurate data collection of everything that happens in your business financially. Seeing where the money comes and where the money goes is one of the greatest ways of showing that you’re trustworthy to the bank. If you haven’t started recording your finances, starting from today as you’re going to need to build up a good amount of data before applying for a loan.
4. Conclude What Your Business Needs & How Much It Costs
You need to figure out what your business really needs in terms of assets or resources in order to determine a specific cost for everything prior to applying for the loan of your choice. Once you’ve recorded all the things required for your business to flourish, that’s when you can start to apply for loans. Every bank is going to ask you about what you’re going to need the loan for, and they don’t expect a simple answer. They’re going to need you to list out where almost every penny is going, and that isn’t an exaggeration. You need to be very prepared with your answers.
5. Decide What Type Of Loan You Need
When you figure out all the steps you need to take before you actually apply for a loan, you’ll need to also figure out what type of loan you’re looking for. There are a bunch of different types that you need to choose from, the most common of which is a business term loan for regular small and medium enterprises (SMEs) and equipment financing loans for startup businesses. Business term loans are your usual loans that are repaid with a fixed rate at fixed times throughout the length of the loan, whether it’s a short-term or a long-term loan. Equipment financing loans are self-explanatory, as they are loans that pay for the equipment you’re going to need to start and/or grow your business. Search for the type of loan that your business needs in order to get the best out of it.
6. Look For The Greatest Option Available
Searching for loans doesn’t leave you with a great amount of options to choose from, as the number of banks there are eventually run out. Studying which banks offer the best deals for your specific type of business is what’s going to get you the best possible rates available. It requires hours of research in order to complete the task, but it’s absolutely worth it as you’ll be saving yourself so much money in the long-term along with opening up so many more possibilities for your business with the amount that you’re going to be getting. Look at all the options and evaluate which one fits your business perfectly.
7. Gather The Requirements & Apply
Once you’ve done fitting your business for the perfect loan, you’ll need to look at that specific bank’s requirement in terms of paperwork and business requirements in order for you to start working on getting all the things needed so you can start your application process. In Singapore, the process takes around two weeks to an entire month, so the faster you get started, the faster the entire process is going to be. Once you’ve gathered all the things you’re going to need for the bank’s application, you just head there with confidence and apply.
Banks are always skeptical of every business that walks in to get a loan because of the sheer amount of people that have applied for a loan without a proper business plan and failed to achieve any result which bankrupted them and forced them incapable of repaying their loans to the bank, that’s why the process is very meticulous. If you take the complete opposite approach of complete transparency along with very detailed and thought-out planning then you have nothing to fear and the banks will most likely grant you your business loan very easily. Be prepared to get to work as soon as they’ve granted it, as there’s no time to lose!