Unfortunately, financial limitations are a reality of current market conditions. Are you the owner of a recently opened venture, and are you finding it hard to keep up with the competition and adapt your company’s services and products to customer demands? If so, the key to your organization’s long-term success will be intertwined with the investments you make in your services research and development. On top of that, to guarantee your venture’s predictable development, you will have to invest in your staff’s training, embrace new technologies, and develop an expansion plan in line with market development forecasts.
In other words, for your business to produce money, you will need to benefit from the necessary capital to invest in its evolution. However, this will not be easy. Are your finances already stretched to their max, and do you not benefit from the working capital required to expand your venture’s operations and mitigate the impact of unfavorable industry developments? If so, perhaps the only realistic solution left at your disposal is to apply for a business loan in Singapore provided by a private lender. Small business loans are powerful financial instruments that can provide your venture with the cash infusion necessary for the continuation of day-to-day operations.
A Necessary Step
Going for a business loan is not always a matter of personal choice. If you don’t benefit from the financial resources to secure the continuation of your venture’s operations, or if you are looking at opportunities for business expansions, small business loans can be equivalent to your venture’s long-term financial success. Do you have long-standing ambitions, and have you designed a business development strategy accompanied by a long-term profitability forecast? In that case, the only thing missing to put your vision into motion is to acquire the liquidity necessary for the management of your venture’s day-to-day expenses.
Small business loans can be utilized to pay off your venture’s existing debt to private investors, are a fantastic choice if you are interested in the expansion of your ongoing services, can be utilized to buy off new equipment, and are a necessity if you want to hire new staff, and you can’t afford the expenses associated with their training and salary demands.
When provided by private lenders, business loans can be utilized to reduce the gaps in your venture’s internal cash flow metrics. Plus, they are a solution to improve your management’s credit score, attract investments from other capital-rising ventures, and provide the leeway necessary to successfully reduce the impact of market fluctuations, which lately are happening with increased frequency.
Why Should You Use the Services of Private Lenders?
Ultimately, it’s a matter of convenience and more favorable lending conditions. In our country, the 150 private lenders registered with the Registry of Moneylenders must follow the provisions laid out in the Moneylenders Act of 2008 and limit the maximum interest rates for their commercialized lending packages, regardless if we are talking about small business loans, payday credits, or personal financial aid packages. So, their services are safe and, in many cases, significantly more convenient than the ones provided by conventional lending institutions. Do you need a monetary influx that you can leverage to expand your business operations? If so, going for the private lender’s route will be more than worth it.
As a general rule, Singapore-based private money lenders provide a more streamlined approval process for their credit packages, and the borrowing conditions are usually more lenient. Plus, for the most part, documentation processing times are shortened, and when approved, the money will be disbursed in cash on the spot. The repayment terms for the financial packages commercialized by private lenders can typically be negotiated, the necessity for added collaterals is significantly reduced, and the packages offered to private individuals or business clients are more varied than what is available in the catalogue of conventional lending institutions.
What Are the Eligibility Criteria for Small Business Loans?
The criteria for obtaining a business loan in Singapore will vary from lender to lender. However, by and large, the private entities wishing to benefit from private monetary help in our country must be registered and operating in Singapore and benefit from a valid BizFile that confirms registrations with the ACRA. The lending agency you are collaborating with will require the NRICs of your business directors, at least six months’ worth of previous profit and loss statements, a comprehensive balance sheet that showcases your firm’s current assets, and the latest C-S form submitted to the IRAS (or personal tax returns).
On top of this documentation, your loan application will also typically require to be accompanied by a comprehensive cash flow projection, your company’s credit score report (or at least the personal credit score of the management), and collaterals. The last point is essential, as the vast majority of the business-focused financial packages offered in our country are of the secured variety, and the sums involved are more significant than is the case with personal loans. Do you need, for example, $200,000 to secure your venture’s expansion in a new sector or finalize the purchase of new work equipment? If so, most lenders will require your application to be accompanied by supporting paperwork for the provided collaterals.
What Are the Security Guarantees Offered to SG-Based Borrowers?
Per the provisions of the 2008 Moneylenders Act, the maximum interest rates applicable for the credit packages provided by private lending institutions in our country cannot exceed 4% per month. At the same time, the administration fees for the market-available loans are capped at 10% of their principal amount, regardless of whether we are talking about small business loans or long-term mortgages. How does this translate in numbers?
Suppose you are interested in a $1,000 payday loan that you want to repay with your next paycheck in 30 days. Per the stipulations enforced by the Ministry of Law, the maximum sum you will have to pay back at the end of those 30 days will be $1,140. It’s not exactly great, but it’s good enough to get you out of the financial sinkhole you’re currently dealing with.
On top of setting provisions for the maximum interest rates and credit administration fees, the Moneylenders Act also lays out the protection of loaners against harassment and sets borrowing limits for credit packages unsecured with tangible collaterals. As per the provisions of the 2008 Act, the maximum unsecured borrowing limit for SG citizens or permanent residents making more than $20,000 per year is capped at six monthly wages. However, for those earning less than $10,000 per year, the maximum sum that can be loaned out is limited to just $3,000.
