Things To Ask Before Getting A Business Loan In Singapore

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Through the journey of our life, we get a lot of ideas for opening up businesses. It may be small, large or medium-sized or the business that may conquer the whole globe, but these business owners may need additional money beyond the expectations from what they have in hand. Even after planning every bit, business owners may get in a position where they need extra funds to make things better. Whether you try to cover the unexpected expense that came on the way or to start a new business, a loan is what comes to mind for everyone.

The decision to take an instant business loan comes with a lot of obligation, responsibility and commitment, so that is why it is always a good idea to get your research thoroughly before taking the loan. Before taking a business loan for your business, these are the questions that you need to clarify with the financial institution that you have selected for borrowing capital.

  • How much money to loan?

Okay, so as we start, the first thing that a business owner should do is how much money do I need to borrow from the bank. As the money you get may differ due to various reasons and as you must have already planned an amount that you require for your business purposes, the licensed moneylender Singapore won’t be able to give the decided amount as this amount depends on your creditworthiness or the assets and liabilities that you hold. Taking a loan of a huge amount without planning will only end up with a higher amount of repayment.

Check how much money you deserve to get by checking your own financial health. Also, clearly look at your annual income and expenses and ask the bank how much money you will get for the loan with all the creditworthiness. As there are different types of loans in Singapore, you need to ask what kind of loan you need to apply for. There are secured, unsecured, collateral, guarantor etc., you need to ask the lender what type of loan is suitable for your business.

  • What are the documents required?

Ask for what all documents are required to get this loan because documentation is a crucial point while taking a business loan. Clarify with your financial institutions what the paperwork required is. Getting a loan becomes easier when those documents are arranged properly. These documents prove your eligibility to get a loan because these documents include your yearly financial status. Also, as they ask for ID proofs and address proofs, they will know if you are a genuine person. During documentation, you also need to ask if the documents required are original or photocopy and how much to bring.

  • Time period

The next question you need to ask your bank is how much time will the bank take for the disbursement of the money because the loan process is a lengthy process depending on what type of loan and on the amount of loan you have applied for your business. There is a waiting time for the business loan to come in handy. Sometimes you may get a loan in just a week, but also, other times, it is subjective. So you should ask about the time period of the loan so that it becomes easier for you to decide on business works.

Then you should ask how much time do I have to repay the loan to the financial institutions. Before taking a business loan, know the term of the loan, if it’s short term or long term. This is also an important question to ask about how long the loan will last because, accordingly, you will also have to pay the interest every month for the rest of the term. Then you need to ask if there is any down payment required, not because down payments are bad. It’s just you need to know what the per cent they are taking.

  • Interest rates

The next question that you need to ask your financial institute is what is the interest rate that will be applied to your loan taken. The interest rate can be thought of as an expense for taking a loan from the bank. These interest rates also vary for different financial institutes. To confirm what the interest rate of your lender is and get the lowest interest rate in the market by doing market research.

  • Any external fees?

The other question you ask is about how the repayment procedures with your particular bank differ. You should ask the lender what the monthly dues are and when it is going to start. Also, ask if there are any penalties for the early prepayment and other than that, are there any extra fees required in between the process of the disbursement of the business loan. These are a few questions that will help you in taking a business loan singapore