How To Get A Business Loan In Singapore

Business Loan In Singapore

If you are a businessman or are on the verge of becoming one, it is not always an easy or swift method to run the business with the help of your funding. So, here evolves the concept of taking business loans in order to conduct your business without any scarcity or the chance of causing any shortages of funds. It would be best if you underwent specific processes before getting a business loan concerning several factors like how much is a small business loan and many others. A business loan can be taken or issues under various circumstances.

For example, if you plan to start your own business but lack the capital amount to invest, you can always opt for taking business loans. Again while running a business, situations such as the delay of payments to and fro the clients arise, and thus, in that case, the business loan amount can be used as security money. On the other hand, if you are planning to expand your business, you need to invest an ample amount of money which you can get from the business loans. Further, you will come across how to get a business loan in Singapore.

Types Of Business Loans In Singapore:

There are various types of business loans that are offered in Singapore. The few of them are discussed below in a very brief manner.

  • Business Loan Schemes That Get Assisted By The Government:These loans are introduced to support the enterprises of Singapore by the Government itself. There are specific evaluation criteria for these schemes, which include past financial performances and bank statement records.
  • Business Term Loans That Are Not Secured:These types of unsecured business term loans are generally secured by the personal guarantees of the company’s director but not by any physical property or equipment.
  • Invoice Financing:These types of business loans refer to deals with credit facilities that use invoices as collateral.

Other types of business loans used in Singapore are Merchant Cash Advance, Business Overdraft, Business First Loan, Venture Debt Financing, etc.

How To Apply For A Business Loan In Singapore:

The application process for a business loan in Singapore is listed sequentially in a very proper manner below.

  • Process Of Application:To apply for a business loan, you could either visit the respective website of a relevant financial institution or fill the form. You can also fill the form by physically visiting the address of the institution.
  • Contact Process:After you have applied for the business loan, the relationship manager (R.M.) will get in contact with you to collect all the essential and necessary information about your company.
  • Submission Of Documents:The next step is to submit all the necessary documents related to the company for verification.
  • Verification:The relationship manager will again call you to verify all the documents that you have provided.
  • Approval:After the verification process, the relationship manager will process the application and then submit it for approval.
  • Business Loan Proposal Presentation:After your application is approved, the relationship manager will develop specific proposals and solutions through which you can take your business to a better position with this loan.
  • Visiting The Site:The R.M. will then visit your company or factory to understand the whole scenario about why you have applied for the loan.
  • The Signing Of The Agreement:Finally, after all these, you have to sign the document, which consists of the loan agreement. You should always be aware of certain factors like the loan amount, rate of interest, penalty rates, and many more.
  • Payment:Now is the time to receive the funds that have been approved to you by the financial institution. The required amount is thus transferred to your corporate bank account.

Documents Required Getting A Business Loan In Singapore:

Generally, if you intend to get a business loan in Singapore, you have to focus on certain documents necessary for the loan’s approval. The five most important documents necessary to submit to the financier of the respective financial institute are discussed briefly.

  • ACRA Business Profile Information: The primary document required for your business loan approval is the information about your company from the Accounting and Corporate Regulatory Authority or abbreviated as ACRA. ACRA is the statutory board under the Ministry of Finance of Singapore, which regulates all the business entities and other public and corporate service providers.
  • NOA Of Directors In The Last Two Years:This is again another essential document required to approve your business loan. The Notice Of Assessment (NOA) during the previous two years of every director of the company is necessary to get access to their declared incomes from the company.
  • Latest CBS Report Of Directors:The Credit Bureau Singapore or CBS report of all the directors must also be submitted to the financier. This report actually with the director’s repayment histories, any other outstanding loans, and the different existing loan amounts.
  • Financial Statements Of Company In Last Two Years:The financial statements during the company’s previous two years are necessary as per the financier. The financial statements are nothing but the documentation of the company’s financial activities in the form of balance sheets.
  • Bank Statements Of Last Six Months:The financier also urges to see the company’s bank statements over the previous six months to analyse the daily banking transactions as it displays the revenue and expenses of the company.

To Sum It Up

Thus, this is a brief idea about what you need to do if you plan to apply for a business loan in Singapore. It would help if you always went through the documents and policies thoroughly before taking the loan from any financial institution.

All of your doubts and queries regarding commercial loans in Singapore will be sorted here. It is not a complicated process and does not get discouraged by the name. Many people shy away from taking out loans, and in return, they lose their dreams of owning a big business.