Smart Money: What You Need to Know Before Applying for a Business Loan
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Globalisation and the fast-paced nature of the digital landscape have made it easier for people to realise their dreams. The accessibility that technology grants has encouraged them to start businesses. This change in the socio-economic landscape has also created new avenues for up-and-coming business owners to get funding for their projects.
These days, several individuals and organisations are providing different types of business loans. You won’t face too many difficulties finding a financial plan that is suitable for your needs. But when you are not prepared, you risk entering unsavoury deals with loan sharks.
Before applying for a business loan in Singapore, there are some factors you should keep in mind. These will streamline the process as they will help you craft a plan. Ask yourself the following questions to determine what type of loan you need and where you should get it.
Your answer narrows down your loan’s specific purpose. It can be for purchasing capital-intensive items for operations or financing your planned marketing campaign. By identifying what you will be using the money for, you can determine if you need a short or long-term loan. It will help you plan the rest of your business strategy.
It’s the same question your chosen lending institution will ask. You must conduct a careful calculation of how much you intend to borrow.
Be realistic with incidental costs and include them in your calculations to come up with a reasonable amount. Doing so will also help you decide on your shortlist of prospective lending institutions.
Every business loan application requires your personal credit score. If your business is already running, its credit profile will also be reviewed. Avoid applying for loans that you’ll find difficult to pay in the future. This financing option is supposed to help you improve your bottom line, not hinder your cash flow or reduce your revenue.
Lending institutions have different timelines; the length of their approval processes is often based on their market’s needs. Determine when you need the funds to identify the lenders to approach. Additionally, look at these lenders’ processing times to know which ones can meet the timeframe you have in mind.
Business loan requirements are the same in most lending institutions. These include bank statements, personal credit reports and invoices. If you’re not sure of the requirements, ask your chosen lender and prepare them immediately. When you have everything ready before applying, you can hasten the process.
Taking a business loan has become easy because of the multiple options today. Preparation helps you get things in order, giving you a better perspective of what you need for this new commitment. Capital Funds Investments will help you meet your short and long-term business goals with our different loan plans.
Get in touch with us today to learn more about our financial solutions.