When launching a startup or expanding a company in Singapore, business loans can play a significant role.
The funds are commonly used to purchase innovative equipment, rent space, hire new talents, cover a multitude of expenses, and secure inventory.
But applying for your desired loan can be a headache. Whether you own a startup or a big company, securing enough fund can be a difficult task.
Learning the barriers to get a good amount of funding is worth the effort. Some of them are written as follows:
Poor Credit Score
Credit history is a tool lending companies use to identify a borrower’s paying ability or credibility.
When the report indicates a lack of diligence in paying off past debts, your application might get rejected. Or some might approve a small amount of loan.
A score from 1000 to 1700 should be your aim. A credit history under grades B or C indicates late repayments and delinquency.
A score under grades D or below shows that banks write off the financing. How to fix the record?
Before anything else, check both of your business and personal score to determine discrepancies.
You can request a copy of the report online from Credit Bureau Singapore. The more upfront your finances, the higher the chance of fast loan approval.
In case your score is far from reality, consider non-conventional financing options.
Insufficient Cash Flow
Aside from the credit report, lenders look at the borrower’s cash flow to gauge its potential.
As a business owner, it’s important to calculate the cash flow on a regular basis.
With that, you can increase the chance of a quick application or approval process. Plus, don’t wait for the time when your startup is in a big financial crisis.
To find out how large a funding solution you can afford, divide the net income by your annual debt. It’s difficult, right? Just hire a skilled professional to give you a hand throughout the process.
Absence of a Solid Business Plan
A stable business plan attracts lending companies in Singapore and even in other parts of the world.
Lenders require borrowers to submit an accurate plan. If you don’t have one, don’t expect a quick approval.
When you plan to hire new employees or launch a product next year, spend your time developing a simple yet comprehensive plan.
From the time you walk into a financing provider, you will feel confident with the peace of mind.
What does a good plan include? Aside from a summary of your startup, provide an overview of your market, financials, and products as well.
In case you’re uncertain whether or not the paper is persuasive, seek the advice and feedback of an expert in Singapore.
A Variety of Loan Applications
Businesses of all sizes in Singapore assume they can cover their bases by considering a range of loan applications at a time.
Well, the truth is that applying for many financing solutions can indicate a red flag for most credit bureaus.
Now that you know the reasons why you always get a small amount of loan, what’s next?
Work with a legal money lender Singapore to protect your credit and support your financial needs!