How To Qualify For A SME Loan In Singapore?
To qualify for an easy SME loan Singapore, the applicant needs to make sure to check their eligibility.
Various banks and credit companies have Various eligibility requirements, but they usually are as follows:
- The applicant is required to be a business owner in the first place to apply for a business loan. This is so that a huge sum of money doesn’t go to someone who might not return it with interest.
- The business should be one year old at least or have a minimum of six months of being active in the industry. This is to ensure that no one takes a huge business loan and uses it for illegal activities.
- A good credit score is also necessary for a business loan. A business loan gives a much larger amount as compared to a personal loan, so this becomes necessary to pay back the loan.
Some credit companies can provide a business loan in a desperate situation, even if the business owner has a poor credit score, as there are custom options that may be available after they check the financial status of the business owner.
- Certain documents may be required to confirm these details.
Once the applicant is sure that they have all these requirements, they can fill out an application form and follow some procedures to find out if they can qualify for a business loan. To apply, this is the procedure:
- Filling the application form:
The applicant must fill out the application form with the required information of their business to apply for the loan. While or after filling the form, the borrower could request a call back here.
- The required documents are to be uploaded:
Documents are required to confirm details of the application form filled by the applicant so that the lender would confirm their identity and could check if they are eligible for the loan.
- The application form and documents are to be submitted:
The documents and application form are to be submitted by the applicant. If a call back is requested, a call will be received by the applicant for the loan. The call will convey the possible approval of the application.
- Sending the funds:
After approving the form, the applicant is asked to sign a form so as to provide proof that they understand and acknowledge all the terms and conditions on the form. The credit company or bank will then lease the loan money to them.
As mentioned above, some documents are required to confirm the details of the information filled in the application form filled by a business owner. These documents include:
- The last six months of bank statements.
- The ARCA profile of the last three months.
Quick loan approval:
For a faster application process, the applicant can go online, where the response is quick and can come within only 24 hours or one business day of submission of the application form and required documents. In comparison, a bank takes 2 to 3 weeks to process all requirements, maybe even four weeks if they consider the case to be complicated. This way, one may quickly know if they are surely eligible for a business loan and if it is approved.
Business Loan Tenure:
Business loans have tenure ranging from 1 to 5 years, during which they can be paid back. Tenured can vary from the licensed money lender or bank.
Business plan loans allow the business owner to select different tenures, with or without monthly or other periodically instalments. This can enable business owners to expand or cover expenses accordingly.
SME loan interest:
The interest of a bank loan ranges from 7% to 13% per effective annual rate depending on the type of loan that is secured. The interest rates also depend on the bank or licensed money lender chosen by the interested business owner.
Quantum of the loan:
A business loan quantum varies depending on the chosen moneylender, who tries to check the optimal loan that can give the client the loan based on various factors like credit score, financial history, rate of income, etc. Depending on all these, a business owner may get loans from S$100,000 to S$400,000 if they manage to reach the stringent credit terms.
Tips for applying for a business loan:
- Where to get the loan from:
The loan can be acquired according to whichever type of loan the borrower is interested in and from a variety of different banks. If some research is done, the business owner would realize that there are better opportunities in various legal, licensed money lenders. They offer faster application approval processing and no penalties for cancelling an approved application. If searched for online, a number of licensed money lenders are contactable right away and have agents that they could call or text right away and inquire about the details of their business loan plans.
- Be completely truthful about the required loan:
It is always better to be completely truthful about the required loan instead of trying to cover up some details and have the financial institution find out by an inconvenient means. This could earn the business owner lesser credibility, and they could have a negative record in their credit history that could cause a lot of problems in the future. It is better, to tell the truth about the situation faced rather than to have negative records that could prevent loans and future deals from being acquired in the future.
- Read the terms and conditions of the loan:
Before agreeing to a loan, the terms and conditions must always be read. There could be some conditions on which the loan is to be paid back, or certain clauses that one must not be able to adhere to that should be checked beforehand.
- Pay attention to details of the fine print:
The fine print on the contract to be signed must be read carefully as the financial institution one depends on will assume that the business owner knows it, and the presence of the signature is the proof. Therefore, it is very important to carefully read the fine print.