Click on 5 steps to applying for a business loan
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Author: Ravi Philemon
Applying for a business loan may become that much more easier with an economy that is on the mend.
By: Hitesh Khan/
In Dec 2018, Forbes ranked Singapore as number 8 in the best countries for business. In 2017, Singapore was ranked as the world’s second most open economy by the Heritage Foundation’s Index of Economic Freedom, as well as the world’s second most pro-business regime by the World Bank’s Doing Business report.
Prime Minister Lee Hsien Loong recently said the Republic’s economy is doing well and that the productivity has been high. He added that the economy was not just expanding but also is upgrading and improving. As the economy recovers, small businesses that want to expand are going to need capital.
Applying for a business loan, though, always works better if you lay the groundwork in advance.
Here are suggestions on how to get a business loan.
1. Establish a relationship
If possible, get to know your business banker now, before you need financing. This will give your banker an opportunity to get to know you and your business, how you think, what your goals are, what the financial situation of your business is.
Building a relationship with the lender you are currently working with can help them get to know the intricacies of how you operate your business. They want to know who your customers are, who your vendors are, and what’s going on in your industry. If they can measure different kinds of health and stability indicators for your business, they might be more likely to renew your financing at a lower rate down the line, or graduate you to a better product.
Letting the lender understand your business can only help you out. But if you aren’t open to building a relationship with your lender, then it may be best to work with a reliable loan specialist who may have established relationship with the many lenders in Singapore.
And the best news is, the services of an independent loan specialist is often free. For starters, you should read up more so that you have some basic understanding of how an independent loan specialist can help you in your search for the right loan.
2. Develop a plan
Lenders like to see an owner with a business plan. The business owner needs to show why the business will be successful before applying for a business loan.
And they should have projections to show that they’ve thought about what kinds of revenues and costs they’re going to generate.” In other words, a business plan clarifies why you need the money, how much you need and how you will repay it.
3. Be prepared
The documents required will be determined by the type and amount of credit you need. It may be as simple as a single-page application for a business credit card, or it may require business and personal tax returns, and financial statements.
It is good to understand the legal jargon in that stack of papers you will have to sign before the small business loan is disbursed. A close look at those documents now could save you a lot of headaches later. Be mindful that your bargaining power over your small business loan vanishes completely after you’ve signed the documents.
The small business loan documents could be a bit overwhelming, but with the help of a lawyer of an independent loan specialist, you can get a full understanding of what the legalese means. In fact, many independent loan specialist encourage loan applicants to understand the loan documents before they even complete a formal application for a loan.
Generally, it’s a good idea to get the loan documents ahead of time so you have a chance to review them for a couple of days before applying for a business loan. Most lenders won’t have a problem sending advance copies of the documents, but they will generally only do so if they’re specifically asked.
The documents can be somewhat complex – which is why you may need an independent loan specialist to help you understand what the fine print means.
4. Make Choices
There are many loans in the market for small business owners and not all products may be the best fit for your business. What’s worse is, taking an unsuitable loan could be a huge setback to you personally, as well as to your business. So, an important factor is, work with your lender to determine the type of loan that fits your needs.
5. Think Long-term
Along with your company secretary your lender should become one of your trusted advisers. The relationship should not end once you have gotten your loan. As your business grows and your needs change, you should allow your lender to provide recommendations on other services, such as additional credit, cash management, merchant services, and retirement and succession planning.
How to Secure Small Business Loan Quickly
Before applying for a business loan, talk to the loan consultants at iCompareLoan. We can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.
To find out more about Peer to peer lending versus that of SME loans so as to make an informed decision: SME Loans or Peer-to-peer (P2P) Lending – What is the difference?
Contact us for advice on a new SME loans.
Contact us for home loan or refinancing advice.