Every successful business has one thing in common: a stable capital reserve. Establishing a stable financial foundation is easier than done – these capital reserves require tons of money that a layman does not have on their disposal. As such, there are several moneylenders that can offer you the much-needed capital to upstart and maintain your business venture.
In the moneylending industry, there are both secured and unsecured moneylenders. Some of these companies require their borrowers to provide certain forms of security, while others do not. Upon borrowing, borrowers will then have to pay an interest rate on top of the borrowed amount.
Whatever the case, you’ll want to ensure that you take the necessary precautionary measures if you wish to secure your business’s financial health. Here are some of them:
Things To Note Before Borrowing
1. Select a trustworthy moneylender
You should always ensure you’re borrowing from a renowned and established moneylender who has a proper license. Do your extensive and thorough research by cross-checking with reviews from previous borrowers so that you won’t fall victim to fraud, and be sure to shun any secretive or shady moneylenders.
2. Have a good credit score
The better your credit score is, the higher the chances of you attaining a low rate on your loan. Note that lenders look at both your business and personal credit scores and history, and because most small businesses don’t have a business credit, moneylenders will refer to your personal credit.
The Credit Bureau Singapore (CBS) will issue out a four-digit score that reflects which camp your credit score sits. This score ranges from 1000 to 2000: if you scored a 1000 on your credit score, it’ll put you in the HH category where it’ll hint that you possess a high likelihood of defaulting on your loan payments. Alternatively, if you managed to score 2000, you’ll land on the AA Risk Grade, giving your moneylenders the assurance that you’ll be able to pay back your loans on time.
3. A down payment might be necessary
Some moneylenders may ask for a down payment before granting you your loan. This request is dependent on the borrower’s credit score, but the aim is to simply offer assurance of payment.
4. Documents needed
To qualify for a loan, you’d have to also furnish essential documents like your personal identification papers, CPF Contribution History, financial and bank statements to prove your business track record. Be clear on the required documents you’d have to prepare.
Benefits Of A Business Loan
There’s a myriad of benefits when taking up a business loan. Starting a business from scratch undoubtedly requires a huge chunk of money, and with the high borrow limit moneylenders offer, start-ups can easily fund an entire project by taking up a single loan.
If you have a small business that has just started, you can apply for this loan to enhance and boost the growth of your company, exposing it to numerous opportunities. You may witness significant and all-round development in your brand activities with adequate financing techniques.
For smooth-running business operations, this loan saves owners the risk of a fold-up when there is a dire need for money, and some moneylenders are open to partnership deals with businesses with high credit scores. This feature benefits both parties involved.
Business loans benefit all types of businesses where they have an extended repayment period which can go up to a decade, as compared to those in the market. This lengthy payback time gives businesses ample time to generate adequate Return on Investment (ROI) to pay their debts.
On top of that, moneylenders also offer low-interest rates when it comes to such loans, giving you a financial boost in the long run.
With the above points in mind, obtaining a business loan is much clearer, and this will pave the way for the success of your business. As a credible and honest moneylender in Hougang, Goldstar Credit strives to be your preferred moneylender of choice for all your financial needs. Apart from offering personal and business loans, we are also an approved debt consolidation company that can help you consolidate your debts for you. With a proper license, we also offer excellent financial solutions to ensure that money will never be an issue for your business.