Ultimate Guide to Getting Best Loan for Your Startup Business in Singapore

8 min

Are you thinking about owning an SME (Small and medium-sized enterprises) in Singapore?

Or perhaps you’re planning to finally launch your startup business?

Indeed, Singapore becomes a favourite destination for many people. But, it’s also a tough place for a startup business to survive. Financial support for startups is limited, and the cost of operating a business is high. Starting up a business requires a well-versed approach and years of planning to reach the fair market.

Even the businesses that have been around for a long period of time could be thinking about development and growth. In the expansion and establishment of businesses, both require full financial support.

So, finding it inconvenient to perceive some funding for your startup venture!

Fortunately, thanks to the numerous financial institutions, banks, and other financiers! By virtue of those, you can easily apply for a startup small business loan in Singapore. So, whether you’re thinking of starting a business or have just registered yours, you can accumulate enough financing to jump-start your business smoothly and rapidly.

Usually, most banks and licensed money lenders in Singapore offer great financing options with a variety of loans and the best interest rates. This further helps them to
expand their businesses’ operations or accumulate new equipment or branches.

Nevertheless, which are the best loans for your startup business in Singapore? Here, maybe you get confused.

But, don’t worry!

We’ll help in providing a suitable guide over this. So, let’s get started.

What is a Startup Business Loan?

A startup business loan is a financing option that fulfills the needs of a new business. Such best loans cover the expenses towards things like – the purchase of equipment, machinery, supplies, inventory, and furniture; and the purchase or construction of the real estate.

There are actually many types of business term loans in Singapore. Some are just best for handling your business needs – managing cash flow, or for furthering your growth). Whereas, others are offered specifically for certain business needs – machinery/equipment or property loans).

The most common types are Business Loan, SME Working Capital Loan, Temporary Bridging Loan, and Startup Business Loan.

How Do Startup Business Loans Work?

Generally, a start-up business loan in Singapore works similarly to personal loans. In this, you also need to pay the financing regularly. But, the duration period can be longer as compared to personal loans. In addition, you also need to deal with the per-year interest rate.

In most cases, a business loan tenor can be from 1 to 5 years. Instead of your exclusive personal income and career information, it requires income and business performance data to provide financing.

How Loans Will Help Startup Business Entrepreneurs?

As discussed above, a startup SME business loan can’t only secure physical facility, equipment, and tools, raw materials, permit and certification dues. but it also covers the first-year salary of employees. Some entrepreneurs use it to expand the operations and scale of their business in the market. Once you get approval for a business loan, you can quickly achieve the following benefits:

Stabilize Your Business Operations

Perhaps, you achieve a great blast in the first year of your business! The company has established its brand in the market and accomplished new successes and status. Unfortunately, some failure events crash your business plans and enable you to suffer from substantial losses for the coming months and years. 

But with the help of a business loan, you can perfectly stabilize your business, its operations can cash flow without suffering from any unwanted occurrence. Furthermore, a business loan provides enough funding for improving and expanding your brand’s growth.  

Create Budgets for New Processes

If your business is performing well and continues focusing on achieving more, you can apply for a business loan in order to upgrade your existing equipment for taking your business productivity to the next level. By creating budgets for your new processes and operations, you can obtain a business loan from banks and licensed moneylenders in Singapore.

Sometimes, moneylenders provide business loans at a low-interest rate with adequate financing, this means you can scale up your business when more customers accommodate and business performance will improve.

Grab Different Advantages

Maybe you’re planning to open a new branch in the market? Or perhaps you’ve chosen a property for opening an optimal branch? But you’re lacking behind in money to purchase a new branch!

With s Singapore business loan, you can get rid of this situation and secure your tagged property quickly by paying for it later. You might need to explain your business plan involving the property with the bank or financial institution. However, you can obtain the property and grab the chance instantly once you secure your financing approval.

How to Prepare for Your Loan Application?

Well, preparation is an essential factor for successfully getting approval for a business loan. Before applying for a loan, it’s recommended that you show your business plan and relevant experience to lenders. Additionally, startup business owners must be strategic in presenting their reasons for finances that best suits their needs.

Create a Detailed Business Plan

Doing a thorough business plan is an essential factor while applying for a business loan. Make sure your business planning is implementing an executive summary, describing the overview of the business, its strategy, and the management team. It also carries a summary of products and services – like how your business will market these products. Make sure that your business plan also defines how your business will use the loan. All such information will help the lenders to understand all your requirements.

Elaborate Relevant Industry Experience

It’s also important to mention your detailed and relevant professional experience in your loan application. Providing such information will indicate that you’ve applicable skills to raise your business. It’d be helpful if you provide resumes for your business’s management team. It’s necessary to present the appropriate work experience that demonstrates your team’s technical skills and management experience.

Manage Personal Finances

If you’re thinking about acquiring a business loan, moneylenders of Singapore will ask about your personal financial and credit history. It may be helpful to monitor your credit report and correct any concerns before applying for a business loan. But, there are some licensed moneylenders in Singapore who’ll safely provide a loan even you’ve bad credit score. But, some of them may deny this service. Therefore, it’s recommended that you maintain your personal finances and credit score.

Choose a Trustworthy Moneylenders

For this, you need to create a list of moneylenders that offer the types of business loans and could help in establishing your startup venture. Further, determine each loan’s eligibility requirements, such as minimum revenue or operational history. But, before choosing a moneylender, it’s recommended that you read reviews and check their status on Google.

Eligibility Criteria and Requirements for Business Loan

With the availability of various licensed moneylenders in Singapore, it almost becomes quite easy to obtain a business loan with a simple process. By fulfilling the requirements and eligibility criteria for approving a business loan, an entrepreneur can take advantage of it.

Along with a business plan and reliable income, there are some things that every business owner considers to obtain financial services from lenders. Once you’ve determined financing interest rates for the start-up working capital loan, your lender will ask you for the following proof of eligibility and documentation.

Eligibility Criteria

For receiving full approval for a business loan, make sure you’re eligible for this. The eligibility criteria include:

  • Must-have Singaporean-registered business
  • A minimum of one-year operations in Singapore
  • The minimum age must be 21 or above.
  • Must earn the minimum income established by the lenders (varies).
  • Business must be financially healthy.

Other Required Documents

The startup business owner must have the following documents in order to get the approval for a business loan. They’re:

  • Must have all business directors and partners’ NRIC
  • Accounting & Corporate Regulatory Authority (ACRA) recent business profile and information report
  • Personal (partners) and the company’s recent income tax assessment notice
  • Must-have few recent months’ financial statements
  • Invoices and business contracts in the past few months
  • Provide recent utility bills under the company name
  • Attach bank statements in the previous year/six months
  • Partner, director, and company-owned assets
  • Must-have any Office or Shop Tenancy Agreements
  • Singpass

Wrapping Up!

If you don’t have enough capital to kickstart your firm, a business loan is a viable option. Many SMEs in Singapore are taking out business loans for giving a new turn to their enterprises. But obviously, it requires proper financial planning and a strategic step to get your business off the ground.

There’re various types of business loans available in the market. That’s why it’s important to know which is best suited for your business. But, it’s important to know which is best suited for your business. For choosing the best one, you can obtain assistance regarding business loans from banks or Licensed Money Lenders in Jurong East.

We hope our article is available to provide appropriate information. If you have any queries, then you can contact us at any time.

Thanks for Reading!


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