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Advantages SME Loan In Singapore

These are some of the advantages one can benefit from when taking an SME loan Singapore:

  • Fast Response to the application of business loan:

While a bank usually takes 2 to 3 weeks to process a loan application, and sometimes maybe even four weeks if the case is complicated. When applying for a business loan to a licensed money lender online, instead, on the other hand, they reply as fast as within 24 hours or one business day.

  • A huge amount that can be withdrawn:

Huge amounts of money up to S$100,000 to S$300,000 can be borrowed from a licensed money lender or a bank. This can help a business make investments and regain the money quickly to pay back the loan.

  • Loans based on income reports or credit score:

Business loans, when taken by a licensed moneylender, is based on income reports instead of the borrower’s credit history. When a business loan is taken from the bank, they check the credit score. This is why a business owner can take a business loan from a credit company even if they have a clear credit history and no credit score, but for a bank, a good credit score is necessary.

  • No penalty for rejection of an approved loan:

After an applicant applies for a loan and gets it approved, they can change their mind cancel it without having to face any penalties with online applications to credit companies.

  • Loans even on no credit score with no history:

Loans can be given from licensed moneylenders, even if the business owner applies for one and has a clear credit score with no history. As long as their business has been active for at least six months, they could go for a business loan.

Types of business loans:

There are several types of business loans that also come with different advantages depending upon the business loan chosen as each has different characteristics and are structured in different ways. The different types of business loans are:

  • Business Unsecured Term Loans:
  • For this kind of loan, there is no collateral taken of personal property or personal items. So it requires a good credit score, good credit financial history or good cash flow history. When all these things are checked, an amount of S$50,000 to S$500,000 can be given to the business owner by instalments over a period of 3 to 5 years.
  • Business SME Micro Loans:

SME Micro Loans are to help small or middle-sized businesses or SMEs fulfil critical needs and to purchase work equipment. They are made up of monthly instalments that add up to a maximum of S$100,000.

  • Business SME Working Capital Loans: 

SME Working Capital Loans were introduced by the Singaporean Government to help SMEs to get unsecured loans for a maximum of S$300,000. It is repayable at any time and has no penalties and no collateral or pro-rated interest rates.

  • Business Trade Financing Loans: 

If a business owner is looking to purchase more raw material in bulk to make business owner products, trade financing is the loan they need. The desired products are then purchased until the end of the loan’s limit. These funds are quick and given outdated on credit, making them effective and perfect for the job. However, interest has to be paid along with the loan.

  • Business Property Financing Loans:

Here, a certain amount is leased to the business owner on the condition that some property is taken as collateral in case if they don’t pay the loan back. This is considered to be preferable for most business owners as the interest rate is low. The low interest rate is because the moneylender doesn’t have to worry about the business owner not paying them back as they gave the property as collateral.

  • Business Equipment Financing Loans:

Equipment financing loans are a type of loan that is specialized for helping entrepreneurs by using the money to buy the equipment they need to run their business. Buying better, faster equipment can make a huge difference in the number and quality of products manufactured. It is a must for all business that manufacture products to keep improving the cash flow.

Here is how to get SME loan:

  • First, the business owner should do some research to check if they can get the loan from a suitable bank or financial institution and check for a loan that fits their needs perfectly.
  • To secure a business loan, be sure to request a callback. Then fill in the application form consisting of the necessary information needed for the loan.
  • Once the application form is filled in, be sure to upload or send required documents so that the bank or licensed money lender will be able to confirm the required details.
  • Now, wait until they call the borrower back to confirm the application process.

If one has applied for a business loan from a financial institution online, they could get a call within 24 hours or a business day. If they have chosen to take the loan from a bank instead, it will take 2 to 3 weeks for the application form to get processed. In some cases, they consider being complicated. They could even take four weeks.

It’s important to remember that there is no penalty if a loan applies to a licensed money lender is cancelled,

but if the application is cancelled from the bank, one could face a penalty.

  • Once the interested applicant has successfully applied for a business loan, then they are called to sign a form. It is assumed that the business owner has understood and acknowledged all the details mentioned if they have signed it, as the signature is proof of that. It is important to read all the details mentioned in fine print as it could ask for a number of things that the business owner may not agree to. Reading the terms and conditions to understand how the interest is calculated is important as well.
  • Once the form is signed, the money is sent to the borrower, and the deal is completed.