Do you own a business in Singapore? Then you might know quite well that getting loans for small businesses in Singapore is considerably easier to run smooth business operations. Having adequate funds is the main challenge most SME owners face. And here the importance of taking up business loans! Starting from expanding your business, filling up operating capital gaps, purchasing necessary inventory, and renting property – business loans can be a life savior for startup owners. In this guide, you will have an idea of the necessary knowledge to secure a fast SME loan in Singapore.
What are the minimum requirements to get a business loan in Singapore?
According to the law in Singapore, If you have not commenced your business yet, you won’t be qualified for getting a business loan. Even if you own a startup, you will have a valid registration for at least 6 months for qualifying to apply for a business loan.
Hence, first of all, you need to register your business anyhow and commence business operations on a small range for at least 6 months. After that, you can attempt to apply for an SME business loan. Although, If you are severely financially strapped, you can apply for a personal loan to commence your business operations. But, be sure that you will be able to consistently repay every month. For that, your business plan must be functional enough. Else, you have to repay from your pocket!
What documents do you need to furnish to apply for a business loan in Singapore?
For getting a regular business loan in Singapore, you need to furnish proofs like your present bank statements, financial reports for the last 2years, GST declaration, and other documents. If you are applying for SME Working Capital Loan, you have to show your ownership to the company, like ACRA (Accounting and Corporate Regulatory Authority) records. If you will apply for a loan for a startup business in Singapore, it only requires a little documentation or sometimes zero documentation.
How long does it take to process a business loan application in Singapore?
In Singapore, business loans need more processing time than personal loans, requiring a thorough background checkup. Usually, it takes somewhere around 2 weeks or more for overall processing, as the provider needs to go through a lot of paperwork. It’s quite appreciable as the business loans are mostly of large amounts. So, lenders want to be certain that the right people, who can be able to pay back the amount, are going to get the loan. During economic trouble, banks get a large volume of business loan applications, which results in more processing times than usual.
What are the barriers to getting Business Loan in Singapore?
As stated earlier, there are various types of business loans available for owners in Singapore. And the government leaves no stone unturned to ensure that more small-scale business owners can avail enough funding for starting their businesses. Although you may face some barriers while applying for business loans, it might sometimes be unsuccessful. And you may get to know that after waiting for 2 weeks for it to be processed fully.
The main “problem areas” what you are facing in the way of securing a business loan in Singapore are discussed below:
Ownership
In Singapore, Government-aided financing is available only for the businesses registered owners, who have at least 30% ownership of Singaporeans. If you are not having enough Singaporean shareholders, it may be difficult to secure a business loan.
Business Track Records
Getting a business loan in Singapore can be tricky! The loan providers usually want your business to be in operation for at least 6 months for qualifying. Additionally, if you already have an established one, you may also need to showcase proof of your annual revenue for the past few years. So it’s clearly understood that it might be difficult to get a business loan for beginners who are about to start a business.
Personal Credit Score
If you have a low credit score, the loan providers may refuse to accept your loan application. A poor credit score compels banks to doubt your capability to pay back your loan amount on time. Keep in mind and your credit score impacts the possibility of getting your business loan. The more credit score you have, the more chances you have to get the business loan at a low-interest rate.
What are different kinds of lenders available in Singapore?
With technological advancements, various forms of lenders have been emerging. Particularly, the Fintech companies in Singapore have changed financial scope and services by just using data and technology. Everything has been automated, and the lending and processing models have gone digital! Now, you can expect the latest and improved SME loan application processes, which get you your intended finance much faster.
For financing your business in Singapore, you can get many options to choose from. There are many types of lenders, which you can get in Singapore.
How to Get the Best Loan for Your SME Business in Singapore
It’s quite challenging to find and choose the best financing options from the lot for your SME business in Singapore. The best way to get a business loan is to identifying your funding needs. An SME may require adequate funding for a plethora of reasons. For making the right decision about funding your business, you need to ask yourself the actual need for the funds! Ask yourself whether you want cash to fulfill short-term needs or long-term problems. Or maybe you’re on the way to expand your business very soon. So, before choosing among the lenders or services, you need to recognize the purpose of your funding.
Final Verdict
SMEs who decide to take up business loans may find this article useful by acknowledging various useful knowledge of business loans from different lenders for fulfilling their funding needs better. With proper determination, SMEs in Singapore who stay prompt and efficient can undoubtedly survive the new normal phase of the financial system.
