It takes a lot to run a business, big or small. It needs business know-how, marketing knowledge and, of course, funds. To grow your business and live the entrepreneur’s dream, you may have to take a small business loan. This can be through a bank or a licensed moneylender in Singapore.
But before these establishments give you the time of day, you have to show them that your business is worthy of the money they’re going to lend.
To make sure you get approved, follow these four business loan eligibility-boosting tips:
1. Develop a Strong Business Plan
It would be nice if you could just walk into a moneylending establishment and say, “I need money,” and they’d give it to you right away. Unfortunately, it isn’t as simple as that. A business’s endgame is almost always about money or profit, but from the very beginning, you must have a solid business plan. Without planning, business owners may find themselves being turned down for a loan.
That’s why it’s important to create a business plan that details the purpose of your loan. Knowing what you’re going to use the money for will enhance your chances of getting approved for a loan. What’s more, a strong business plan lets lenders know that you’re a smart borrower.
2. Keep Your Documentation in Order
The application and approval process of each lender is different. Some might require a minimal amount of information, while some might take months to complete the process. But, you can do one thing to prepare and hopefully speed things along: get your documentation in order.
Ultimately, lenders review an application based on your risk profile and credit report. Readily available and clear financial statements, both old and current, give lenders a proper view of your fund management abilities. A well-managed balance sheet shows lenders that your business is fiscally responsible and financially stable. All these elements go a long way towards improving your loan eligibility.
3. Review Your Online Presence
Almost every business now has some kind of online presence. Some have it all—a website and well-managed social media — while some have either of the two. Having an online presence is essential for businesses nowadays, especially for small enterprises. With the advent of one-click connectivity, 82 per cent of smartphone users look up possible purchases before they buy in-store. What’s more, 45 per cent read reviews before making a purchase.
These numbers show how important your online presence is. People’s perception of your business online can influence lenders’ decision on whether to grant you a loan or not. It’s part of their due diligence to review your business’s and your personal online presence. With a polished online profile — positive reviews and professional conduct — you can show the potential your business has.
4. Prepare to Provide a Collateral
Moneylending is a business unto itself. This, of course, means that lenders need you to provide collateral so they have something to fall back on in case you can’t pay your loan. Collateral can be an asset, such as real estate or inventory, which lenders can seize and sell.
Before applying for a loan, consider what assets would be appropriate to use as your collateral.
An Easy Way to Acquire Business Loans
At Capital Funds Investments, we understand the financial needs that come with running a business. This is why we offer both secured and unsecured business loans to give you the boost your company needs. When you work with us, we’ll give you the best lending service to help you take your business to the next level.