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3 Advantages of Unsecured Business Loans

3 Advantages of Unsecured Business Loans 22/04/2022

3 Advantages of Unsecured Business Loans

According to the Singapore Department of Statistics, 99% of all businesses in the country are small and medium enterprises. SMEs also support approximately 70% of local employment.

SMEs are the backbone of the economy. Unfortunately, many of them find it difficult to get the funding they need to grow their business. Some turn to financial institutions for a business loan in Singapore, to help them cover operating costs, expand their business, purchase equipment, and pay for other expenses.

One option available to SMEs are unsecured business loans. Read on to learn more about them and their advantages.

The Benefits of Unsecured Business Loans

Collateral-Free Agreement

An unsecured business loan does not require security. Because collateral isn’t required, borrowers won’t have to worry about losing their assets in case they’re unable to pay their debt.

For this reason, unsecured loans are ideal for businesses with few or no assets yet. It makes funding more accessible to small organizations that would otherwise not be approved for secured loans.

Fast Processing

Generally, applying and getting approved for an unsecured loan is faster than with a secured loan. This is because valuation of collateral isn’t needed. Also, depending on the lender you choose, the entire process–from application to closing the deal–can be done in a day or even faster.

Flexibility

Unsecured business loans, can be used for multiple purposes. You can use what you’ve loaned to hire more employees, open more locations, expand your inventory, renovate your premises, and more.

Who Can Apply for an Unsecured Business Loan in Singapore?

Requirements vary depending on the lender, but generally, credit worthiness is a must. Your chances of being approved for a loan improve if you have good credit. Additionally, your lender may request additional documents such as Income Tax Notices of Assessment, corporate bank statements, and National Registration Identity Card (NRIC) copies of the board of directors.

Other requirements, such as having been in business for at least a year, must also be met.

man receiving loan

When to Apply for a Business Loan

A loan is a financial commitment, so you should consider carefully whether you need to get one in the first place. Here are some common signs that taking out a loan is a wise step for your situation:

You’re Aiming to Improve Your Credit

Taking out a small business loan now and paying it back on time will help improve your credit score and increase the likelihood of getting approved for more significant financing in the future.

You Need New Equipment

Whether it’s a new forklift or several computers, new equipment can improve your business processes and boost your bottom line.

There’s an Opportunity That You Can’t Miss

Perhaps you’ve found a better retail space with more foot traffic, or you were offered inventory at a discount. An unsecured loan will help you take advantage of these and other opportunities.

You Have Few or No Assets

Whether you need to fund your company’s next stage of growth or stay afloat until a crisis passes, an unsecured business loan will help you cover associated costs without the need for collateral.

Grow Your Business With Help From Capital Funds Investment

Lack of collateral doesn’t have to be a hindrance to business growth and success. At Capital Funds Investments, we offer both secured and unsecured business loans to organizations of all sizes. It takes only a maximum of 30 minutes after application for us to verify your eligibility and come to a decision.

Contact us today to learn more about applying for a business loan in Singapore.

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