Nowadays, it is very easy to get a business idea because of the variety of ideas that often pops up everywhere. Some of these ideas are quite good, but not all of these ideas can take shape without the right amount of funding. Even if you managed to launch everything online, you will need to produce the products you are selling and that requires money.
These ideas must also be acted upon immediately because some of them would not remain popular for long. Once someone acts upon that idea, you would find yourself moaning about the lost opportunity.
However, money is not very easy to come by especially for many people. While one can borrow from family and friends, the amount may not be enough to fund the business and the conditions of the loan may be too much.
Although banks do offer business loans for those who wish to open a business, it is very difficult to get an approval. Banks do not usually approve loans for small to medium businesses since they are perceived to be high-risk borrowers and they still do not have the financial stability to lean to that will allow them to pay off their loans.
Government funding is also possible. However, your business idea should be unique and you must be able to raise to $21,500 to get a higher grant.
Moneylenders to Save the Day
Fortunately, moneylenders are available to help small to medium business owners get the business loan they need for their business. These moneylenders are more relaxed when it comes to their loan approvals and they could approve loans as fast as 24 hours if all the documents are submitted correctly.
But, before you run to a moneylender to get a business loan, you must remember the following points to ensure your application would be as smooth as possible:
- Make a clear business plan first. Even if your plans are laid out in your mind, you need to present to the moneylender or your investors your plans for the future. Without a business plan, they will not be assured that you have a clear plan, especially if something goes wrong. Your business plan would also help your investors or moneylenders to point out loopholes you can sort out to make your plans more solid.
- As you make your business plan, research the background and offers of all the moneylenders in the country offering business loans. Check if the moneylender is legitimate by looking into the official registry of moneylenders found in the Ministry of Law website. Once you validated they are legitimate, try checking online about their performance as a moneylender and if there are tips from other borrowers on how to get better deals from the moneylender in question.
- Check all the rates for business loans offered by the moneylenders you shortlisted. You must remember that business loans have high-interest rates, so you need to consider your business’ current financial stability. Will you be able to pay the monthly repayments? If you think you will need a more flexible loan program, ask the moneylender if they will be open for a flexible plan. If you plan on paying your dues early, ask if they will ask for a penalty charge for early repayments.
- Check what type of business loan is available through the moneylender you are planning to contact. There is a wide variety of business loans available and it can cover a wide variety of purposes. Some of them are also different in terms of their loan tenure and conditions. Check which one is right for you and ask about the requirements and conditions.
- While checking the loans available for businesses, know how much you will need. Consider all the things you need to pay for and if you are facing a slow month, borrow some extra money that will help you during this slow season. Just make sure you will be able to pay your loans on time to avoid defaults.
- Ensure that all your documents are up-to-date and have them on hand. Moneylenders will look into your data to see if they can trust you and they will regularly contact you for updates.
- You should also check your credit history, which you can request from Credit Bureau Singapore. Although you are applying for a business loan, your background as a borrower will be checked to see if you are a good borrower. If you are a new business, they will consider your financial history as an individual to see if you have other sources of income that can pay for the loan while your business is not yet picking up. If you think your income isn’t enough, apply for the loan with your business partner.
- If you have bad marks on your credit history, make sure you plan your way into clearing them up. Pay your current dues on time and seek help if you have a black mark on your history.
- Before signing the contract for your business loan, review the contract with the moneylender and ask everything you want to know about the loan you will sign-on. You must do this before signing because once you sign, it will be difficult to get your loans revised unless it is valid.
If you wish to open a business, you must be prepared to tackle all the challenges that come along with making one. On the monetary side, you should do your research about all the possible options you can use to fund your business, especially if you plan to use business loans.
Proper research and preparation will help you reduce the risk of having problems throughout your loan tenure, as well as help you understand your responsibilities as a borrower.
Remember, loans are serious business and they must be tailored accordingly so you will not have problems defaulting it. If you do default it, it may cause trouble in the future if you need to get another business loan for your money needs.