Few can understand the woes of a business owner when his business meets with turbulence. When it comes to the topic of money, those willing to lend it are few and often, it might not be enough to tide through the trough. Sometimes this comes despite having planned ahead of time or having estimated the costs needed to maintain a business.
That’s when you might start thinking about getting a fast unsecured business loan. But what does it entail? This guide will answer your burning questions.
Government assisted loan schemes are loans that allow small and medium enterprises to get access to funding more easily, while lowering the cost of funding for the financial institutions providing it.
Some examples of these loans include:
- Enterprise Financing Scheme – Project Loan, which supports domestic construction projects undertaken by companies in the construction sector.
- Market Readiness Assistance (MRA) Grant, which provides support for in-depth Free Trade Agreement consultancy and overseas business development.
These are loans that do not require collateral but depend on a company’s personal guarantees. A company’s financial performance may be evaluated by the bank or financial institution before offering the loan. The company’s current bank statement records may also be taken into account, as well as the company directors’ personal credit records.
These types of loans typically have a maximum loan value of $500,000 and a repayment period of between 1 and 5 years. However, the interest rate may vary depending on the valuation of your company.
Similar to unsecured business term loans, business overdraft loans can also be collateral-free, depending on which bank you choose. The biggest appeal of such loans is the fact that you only have to pay interest on the amount used, which is disbursed to you via a direct credit line.
However, repayments terms and loan limits vary across institutions. Most banks require companies to have at least 30% locally held shareholding and be registered in Singapore for at least two years.
Offered by OCBC bank, it is a unique loan that is offered to Singaporean businesses which are between 6 months to 2 years old. The company must also be at least 30% owned by Singaporeans or PRs, must not exceed an annual turnover of $1 million and/or has less than 10 employees.
A guarantor is required for this loan, which has a repayment period of up to 4 years.
Also known as receivables finance, invoice financing is a way for businesses to borrow money against the amount due from customers. This type of loan is rather flexible and allows you to obtain fast cash to tide through urgent payments and invoices.
When approved, you may draw up to 80% of the invoice value, though this may vary across banks or other lenders. There is also a maximum loan limit, but it again depends on the lender – banks tend to have a stricter loan limit depending on its valuation of the company.
Find out more about the different types of loans business here.
Fast unsecured business loans have the appeal of, well, being fast. These types of loans are especially useful for its quick turnaround in disbursing money to help your business tide through a storm, and you won’t even have to worry about gathering lots of documents for collateral submission.
Nowadays with online application processes and Singpass’s MyInfo, the funds can be disbursed as quickly within 48 hours or less – a saving grace for many small businesses prone to financial shocks and economic downturns.
There are also many different types of such loans so you can almost always be sure to find something that suits your needs – whether you need one to finance cash flow or bridge revenue gaps.
While the requirements vary across the numerous banks offering fast unsecured business loans, a few things remain constant – credit scores. This criterion applies to major shareholders within the group, as well as the company’s past record of credit and balance sheets.
The most important thing a bank or money lender will also consider is the company’s financial performance – this is crucial in helping the financial institution measure the risks of providing a loan to your company, through a valuation of the business.
You want to make sure to keep a tidy record of past accounts and keep them readily available when you are applying for a business loan.
With banks, the process is often fast and quite readily available. Since the advent of ibanking and auto-fill online application forms, the waiting time has been shortened to as quick as 48 hours.
However, borrowing from a bank may not be suitable for everyone – especially for those with less-than-ideal credit scores.
Smaller and newer businesses may also find it harder to get an unsecured loan, as newer businesses’ loan value often depends on how much the institution finds the whole business to be worth.
Besides banks, licensed moneylenders can also provide the same, if not similar, loan contract comparable to those offered by banks. They can turn out to be valuable funding sources should your application with the banks fail.
The process of getting a fast unsecured business loan with licensed moneylenders is quite straightforward – detailed below:
- Apply for a loan online on the money lender’s website.
- The loan executive will call you within the day or the next day to make a trip down to their office in person.
- Remember to bring along the relevant documents when heading to their office for verification. Be prepared to also answer questions about your company, keeping in mind that the more honest you are with your needs, the easier it is for the loan officers to help you with finding a loan that suits you best.
- When the loan is approved, you will need to sign the loan contract in person at the office. Make sure to read and be clear on all the terms and conditions before signing above the dotted line.
- The funds will then be credited into your preferred account immediately.
Knowing which documents to bring and prepare ahead of time can save you an extra trip down to the office, especially when you’ve got other things on your plate to worry about.
Here are the 6 key documents to prepare and bring along:
- ACRA business profile information
- Latest 2 years’ Notice of Assessment (NOA) of all directors
- Latest Credit Bureau Singapore (CBS) report of all directors
- Latest 2 years’ company financial statements
- Latest 6 months’ company bank statements
- Accounts Receivables Aging List (i.e. amount of money you expect to receive from your clients/customers for your products/services)
Syncredit is a licensed moneylender that provides short term business and working capital loans for small businesses and startups. Eligible companies can borrow up to $300,000 for a working capital loan with competitive interest rates from as low as 4% per month. Terms and conditions apply.
Apply online with us now and we will be in touch very soon.