Get a Business Loan In Singapore
Singapore government has been supportive in getting their businesses back on their feet while facing a cash crunch. Having a shortage of working capital can affect the daily operations of any business and that is where business loans are most helpful. There are different sources where businesses can avail loans from, from traditional methods to different financial services.
First and foremost option when it comes to business loans are bank loans.
There are different types of bank loans available for business loans such as working capital loans, microloans, etc. The maximum amount any bank can provide differs with respect to the banks you choose. This amount also relies on your company’s assets, revenue, cash flow, industry sector, and other factors.
The amount you need might require a calculation of your existing scores and ability to repay. With that being said, it is not necessary that you will avail the amount you need to expand or take in a larger project.
The eligibility criteria sometimes become too harsh on the businesses, especially if yours is a SME. The background check on your revenue, bank balance, etc can be taken into consideration when it comes to getting approval for a bank loan.
The interest rate also plays a huge role in choosing the right bank loan plan for your business. Sometimes the interest rates of some business loans can get you into huge debt. Therefore a clear understanding of where you are taking the loan from and the terms and conditions need to be clear beforehand.
The application time taken for traditional loans is anywhere from 2 to 4 weeks. This can be longer if you are not familiar and known about the necessary documentation. The documents needed for the application process also varies from bank to bank.
If you are not having enough resources to get a bank loan, then there are other options for getting funding for your business. One of them, which is also very common in Singapore nowadays is receivable financing. There are two types of financing in this method, Invoice Factoring and Invoice Discounting.
Invoice factoring is in the rise when it comes to SMEs trying to get quick funding for their working capital. Invoice factoring is a financial service where a company decides to sell its invoices to a third party called “factor”. There are factoring companies that facilitate such services.
Factoring works in a simple way and avails immediate funding without any hefty fee. The application process is also easy compared to traditional bank loan applications. You need to sign up for an online account with the factoring company, they will assess your credentials based on your online account software data and approve for the factoring services.
The best part, when it comes to Finaxar, one of the leading factoring companies in Singapore, is that there are no application or processing fee. Once your application is approved, you get an upfront payment of 80% of the invoice amount and you don’t have to worry about any other charges too. Once your customer pays off the invoices, the factoring company extends the rest of the 20% reducing a small service fee.
The factoring charges and the percentage of amount get credited can be different for different factoring companies. Therefore, it is necessary to understand and carefully read the terms and conditions before you choose a factoring company to work with.
Business loans can be availed from other methods such as asset financing, project-based financing, microloans, etc. Each of them, in turn, depends on your business and its status. Microloans can get you up to S$100,000 on an average for a time period of 4 years. This kind of microloans are meant for budding SMEs and there are rules that govern the eligibility for these microloans too. Typically, a business with S$1 million annual sales or with less than 10 employees and owning 30% of their stakeholders are eligible for these loans. Interest rates for these types of micro-loans also differ from bank to bank.
Finaxar is committed to helping businesses get back on their feet as fast as possible. There are three product lines that are specially designed for this purpose that suits different industry verticals. Receivable financing that allows you to get immediate funding for your business by selling your unpaid invoices. Finaxar credit line is best suited for SMEs that are looking for immediate funding for working capital. Growth capital funding allows you to fund your business based on your future sales.