What are the Debt Solutions for Entrepreneurs?

Starting a business as an entrepreneur is a tricky business, especially if you do not have enough funds to get your business started and keep it going while you try to earn enough to be self-sustaining. Unfortunately, if you go too deeply in debt, you may find it hard to stabilize your business and make a breakthrough.

In order to prevent this from happening, entrepreneurs must learn and understand the difference between good debts and bad debts and how they could maintain their business afloat without going into debt.

If you are an entrepreneur, here are the things you should know and help you with your debt.

Good debt Vs. Bad Debt

If you take out personal loans from a moneylender or other forms of credit like secured loans or credit cards for the benefit of your business, these credits are known as good debts. The money you get out of these loans can be used to develop your business’ assets and value.

Bad debt, on the other hand, is acquired if you take out any financial product or credit that will not be used for the business in any way. It can also be any purchase done through credit which is over the amount you could pay on time.

Why do entrepreneurs end up getting bad debts?

There are three major reasons as to why entrepreneurs end up with bad debt and what you should do when it occurs.

  1. Your company’s performance is still unstable, causing your revenue to be unstable.
    Every startup business gets to this point when their income is not the same every month. When this happens, it is crucial that you have a backup plan on how to pay your bills on time and without problems because you may find it difficult to get your debts sorted out in the long run. Do not hold off payments as much as possible and pay them immediately so you won’t have problems once the next month comes.
  2. You do not have an extra fund source.
    While your business is still picking up its pace and do not generate regular income every month, you will need to have a backup fund source to pay your workers, your production and other bills. You should not press your business to make what it could because you will need to give it time to pick up a working trend to get everything established. Try putting in more profits so your company can sort out its operations and help it become self-sustaining.
  3. You are overconfident with your revenue.
    When your company gets its first pay cycle, do not immediately jump in a large project or expansion and use the money. You may think it is a productive debt to help the business when you get the funds, but you may find yourself under heavy debt. Plan your expansion project thoroughly and sort out the things you need to pay first.

How to Get Out of Bad Debt?

If you find your company in a bad debt situation, it is crucial you act upon it as fast as possible. Bad debt can start your company’s decline and may put you more in debt.

You can start by utilizing a debt reduction plan that would help you get rid of all the expenses you do not need for your company. Just like fat in one’s body, there are areas in your company where you can reduce expenses.

When you get some funds, use the money to help reduce these bad debts and try to use the money to improve your company’s performance. It may take a lot of work, true, but with a little patience and dedication, you can help reduce the debt your company has and focus on what is important.

Once you pay off one expense, use the money you allotted for that expense to pay off the next one until you pay everything. You can begin with the smaller debts and work your way to the larger debts. If one debt has large interest rates, go pay them first.

You can also approach moneylenders and get a personal loan to help you with the bills you need to pay immediately while your company is stabilizing its revenue and operations. Moneylenders can offer flexible personal loans which would match your needs and you do not have to worry about paying it immediately. You can even consolidate all your debts into one personal loan which has a low-interest rate, effectively helping you reduce your monthly repayments altogether.

Of course, before you approach a moneylender, it is important that you do your research on the available loans you can use for your expenses and approach only licensed moneylenders. To check which moneylender is approved by the government, you can check out the website of Singapore’s Ministry of Law for more details.

Final Words?

When you manage to get out of all your bad debts, you can celebrate a little because you finally have gotten your company out of the perils of financial trouble. Since you do not have any bad debts left, you can now use the money to reinvest back into your business and help it grow. If you want to give yourself a little incentive to work harder, you can use the freed money as a salary. If your business is just maturing, it is ideal that you use the money you used to use for bad debts to develop your business and just save the others for emergency expenses.

Bad debts can be avoided if you know what to avoid and if you apply sound and practical business plans to your company. When you get funds from your revenues and from your other income sources, let your business grow at a reasonable speed and do not force it to expand. When you see regular revenues and results for a long period of time without fail, you can then turn your attention into expansion and breathe more easily now that your company is financially stable.

If you need to get a business loan, you can find out more here!


How to Get a Business Loan from Moneylenders in Singapore

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 actually 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 really 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 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 up 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 to 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 are 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 in 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. It is important you do this before signing because once you sign, it will be difficult to get your loans revised unless it is valid.

Final Remarks

If you wish to open a business, you must be prepared to tackle all the challenges that comes along with making one. In 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 troubles in the future if you need to get another business loan for your money needs.


Do I Require A Personal Guarantee To Get A Business Loan?


When starting a small business, you often start with your own ambition, vision, and personal growth. For you to keep it successful, you will need business line credit. When getting a business loan, your personal guarantee is often required during these tough economic times, especially for startup loans.

The personal guarantee is simply an agreement you make in the event that your company can’t pay, thus you sign accepting to repay this business loan. It’s like you are the cosigner of your business loan. This agreement is binding even when your organization is not connected to you personally, like, for example, limited liabilities company (LLC) or a corporation.

Let’s say the corporation fails, for example, and is not able to pay its bills, the moneylender company will activate the personal guarantee you cosigned. A personal guarantee may be required in the company by the owner even when the company is a separate legal entity, for example, LLC or a corporation.

Personal assets can be used to secure a personal guarantee, like the owner’s home equity, or it may be unsecured, depending on the goodwill guarantees by the borrower. The personal guarantee necessitates the borrower into swearing to take responsibility for the loan when the company cannot repay.

Why A Personal Guarantee Is Necessary

Starting a small business is a risky proposal, and the business startup loan is the riskiest loan type your moneylender or bank can issue you with. You almost will still need to sign the personal guarantee even when you are able to access an SBA loan guarantee.

The moneylender or the bank will want you to have a financial stake in the achievement of the business. Plus they will want you to understand that you will be leaving the moneylender carrying the bag, thus can’t just walk away from this should it fail.

A business credit line from a licensed money lender singapore will give you fast and easy access to business funding. This is the perfect way to deal with irregular cash flow, take care of emergencies as well as make the best of profitable opportunities that come your way. Business loans are a financing solution that will afford you quick and easy access to business capital.

The Risk Involved

Whenever you cosign a personal guarantee, you are allowing a moneylender to chase you personally when you are not able to repay the business loan. That could mean many things, depending on the loan agreement you signed on behalf of your business entity. To be included in your guarantee, you may have issued the lender permission to access your assets like property that you own (this includes your home or other valuables) or your investment accounts.

There is also the likelihood that the money lenders may take legal actions against you. This can hugely damage your credit thus making it hard for you to take out loans in the future (this can also affect your prospects of getting a job, purchasing insurances, or even being able to rent a place for you to live).

Family Property
The personal guarantee you sign for your business loan can also have an effect on your family. You need to consider what the collateral you offer will mean for your family as well. Losing your home is clearly a problem affecting your family.

A number of loans will also require that your spouse to also guarantee, therefore assets owned solely under your spouse’s name will also be affected as well (or else, you may be tempted to shift assets to be under your spouse’s name).

Paying For Associates
You might find your self in some serious trouble more than you can handle when the agreement involves the word ‘joint and several.’ This gives the money lender permission to try and collect the whole balance from every and or all the partners who also personally guaranteed the business loans. When the other partners are not able to pay, the money lender will demand the whole balance from you: This means although you are not the sole owner of the business, you may be 100% accountable for the entire debt.

What If I Don’t Have Assets for Assurance

Given that you hold assets, such as equity in a property, you will most likely have to vow them as well as consent to cooperate with them to help repay the loan amount in case it can’t be repaid by your company. In cases where you bring in a cosigner, this individual needs to be prepared to pledge assets in alignment with the loan agreement.

There is a possibility of you not being able to get the business loan if you yourself do not have any of the necessary collateral to guarantee the loan. Consider it as necessary for you to provide a personal guarantee when you need to have the money lending institution to agree to the business loan.

How To Get Protection

However, you need to be aware that once you have signed the personal guarantee hiding behind the business entity won’t cut it. What is required of you and your business is that the loan money is repaid promptly. Before you decide on the type of company to deal with ensure you ask for advice from your financial and tax advisors.

Fully separating your business credit from your personal credit is an essential part of safeguarding yourself and the business. For you to be able to manage the risk, you will need, over time, to shift away from giving a personal guarantee on your business loans. This will be possible once you grow credit for the business and draw together its own assets for collateral purposes, you will be able to stop guaranteeing the business loans.


For you to keep your business startup successful, you will need business line credit. When getting a business loan, you will be expected to give a personal guarantee by your lender. A Personal guarantee is simply an agreement you make in the event that your company can’t pay, thus you sign accepting responsibility for this business loan. Before you sign the guarantee you need to be aware of the risks involved.