Having a healthy cash flow is the cornerstone of any business, whether large or small. With suppliers to pay, salaries to credit, and overheads such as rent and utilities, not having enough cash can force business operations to shut down.
Business owners have several options when it comes to securing credit, such as government business loans, invoice financing, and business credit lines. While each of these methods has its uses, the most flexible and convenient option is a fast unsecured business loan.
Let’s delve into how these types of loans work, where you can find them, and how to apply for one.
You may think of fast, unsecured business loans as personal loans for your business. Instead of using the loan to meet your personal expenses, a business loan is meant to be used for business purposes only, such as payroll, purchase of supplies and raw materials, marketing campaigns, or any other business expenses.
An unsecured business loan is granted without the need for security, which means you do not have to pledge any assets as collateral.
And finally, a fast unsecured business loan isn’t just fast in name only – you can receive your loan within the same day.
Once it has been granted, a business loan may be used to meet any business needs you may have, be they current expenses, or planned future developments.
In contrast, government grants can only be applied toward specific business functions or narrowly defined purposes, making them less flexible.
The difference in how business loans and government grants work is perhaps best illustrated with an example. Let’s say you want to install a self-ordering system for your restaurant, which lets customers send orders through iPads. At the same time, you also need to redo the lights in the kitchen to improve working conditions and safety.
A grant like the Productivity Solutions Grant (PSG) might be helpful, but it will only cover the cost of the iPads and self-ordering system, not the kitchen lighting installation.
So, what should you do?
In this case, a possible solution might be to get an unsecured business loan to fund both the ordering system and the light installation, and then apply for a reimbursement for the ordering system under the PSG.
This way you can meet all your business needs at once while tapping on existing government support.
Ok, you may say, why not apply for the PSG and a business loan at the same time, and use each to fund both respective expenses? The answer: Speed.
Government grant applications take time to process – at the time of writing, the PSG has a waiting time of around 6 weeks. This means that you’ll need to delay your business improvement plans until you get the grant, which is not ideal.
However, fast unsecured business loans can be processed much quicker – same-day approvals are not unheard of – allowing entrepreneurs to move on with their business plans.
Many banks in Singapore offer unsecured loans for business purposes. There are a variety of different loan packages available, ranging from working capital loans to trade finance, banker’s guarantee, and lines of credit.
If you’re not sure which type of unsecured business loan you should apply for, you should contact a bank of your choice to discuss your needs and narrow down the most appropriate options.
There will also be eligibility requirements that you will have to fulfil to be granted the loan you want.
Due to stricter lending requirements, applying for an unsecured business loan from a bank may take a few weeks. In most cases, though, you will likely be informed of whether your loan has been approved or not within one or two weeks.
Another option for getting fast unsecured business loans is from a licensed money lender.
Apart from personal loans, licensed moneylenders offer business loans without the need for collateral – and with same-day loan approval and funds disbursement to boot.
Licensed moneylenders offer competitive interest rates for unsecured business loans, in accordance with prevailing guidelines by the Ministry of Law. Fees and charges are also capped at a reasonable amount to give borrowers a fair deal.
And in case you’re leery of less-than-professional treatment from a money lender, know that all licensed moneylenders in Singapore are bound by rules and regulations regarding proper conduct and professional boundaries.
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 contact you within the same day (or the next day) to meet up at their office in person.
- Remember to bring along the relevant documents (see next section). You should expect to answer questions about your company; being open and honest with your needs will make it easier to structure a loan that suits you best.
- Once 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 the document.
- The funds will then be credited into the company account immediately.
To help ensure a speedy and smooth application process, be sure to prepare the following important documents beforehand:
- 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 Ageing List (i.e. amount of money you expect to receive from your clients/customers for your products/services)
Synergy credit is a leading licensed moneylender that provides short-term business and working capital loans for small businesses and startups. Eligible companies can borrow up to S$300,000 for a working capital loan with competitive interest rates from as low as 2% per month. Apply online with us now and we will be in touch very soon.