Running a business is not easy. It demands a lot of time and capital to stay afloat during the formative stages. Depending on the type of business, it takes time to re coup the initial investment. There comes a time when the investor may want to grow the business and will requires additional funds which are not readily available.
Banks are the most common sources of financing in Singapore or one to qualify for a bank loan they must produce valid identification documents, business permits and/or licenses. If the business is a partnership then all partners/co-owners must be vetted accordingly. The applicant must submit current bank statements, financial statements, tax assessment among others. The applicant must also prove that the business has a minimum turnover of a set amount prescribed by the bank depending on the amount applied for.
So what are the available alternatives to bank loans?
Credit Cards
Credit card financing is an instant revolving line of credit that can be used and repaid as many times as one wants. This is as long as one makes the required monthly payments and that the balance does not exceed the card limit. They can be used on anything one wants whether to pay bills, purchase stock or cover travel expenses. One can decide to pay for items or withdraw cash, it is all up to them.
When properly used credit card financing is a great way to get a quick buck when the business owner has no credit line with a bank. A survey conducted in the US in April 2009 showed that 59% of SMEs had to use credit cards to finance their operations.
However, one has to be cautious when using this line of credit and ensure that they for defaulting.
Crowdfunding
This is the practice of raising money from a large group of people to fund a project or new business venture. It makes use of accessible large networks of people who are available through crowdfunding websites and social media platforms. It builds a circle of investors where funds areraised quickly compared to the traditional sources.
Crowdfunding platforms charge a membership and success fee should one be successful to get the target amount. Investors and donors follow very closely on the progress of the business and have very high expectations. Failure to followagreement can ruin the business relationship.
Licensed Money Lenders
Moneylending is the practice of providing credit to an individual or company that is secured only by a note as a deed of trust, or against a collateral item or property that is equivalent to or of higher value than the loan given. The main difference from banks and other financial institutions is the high interest rates charged which they say is justified by the risk involved.
Moneylending is legal in Singapore and is regulated by the Money Lenders Actof 2008 and Moneylenders Rules 2009. Money lenders will not ask for stacks of documents which means less complication for the applicant. Also, the credit score stays healthy as long as the loan is paid on time.
It is very rare for moneylenders to decline a loan request as they very flexible and accommodative. However, applicants must be cautious to ensure they are dealing with licensed money lenders and not loan sharks.
Conclusion
Although there are many options to financing to boost a business one must consider their needs carefully before committing themselves to a loan. Due diligence must be carried out with a clear understanding of the provider’s terms and conditions. In case of any queries, one must ask and get clarification to avoid getting into serious financial problems.
Quick Credit Pte Ltd
Quick Credit Pte Ltd is the best money lender in Singapore. If you currently need help in anyway, do not be shy and let us know. Anything cash related, we will be able to help you. Our well train loan consultants will be able to come up with a good loan package to help you clear off all your outstanding bills or debts. In doing so, you will help you keep better track of all your expenses and money. We have been a licensed money lender since 2002.
We have the skills, knowledge and people to assist you through the entire loan process while providing you with excellent advice.
In addition, we have one of the highest positive money lender reviews among money lenders in Singapore. Furthermore, Quick Credit is also one of the few money lender open on Weekend!
Interested in knowing more about how you can get a loan from us? You can drop us an email at enquiry@quickcredit.com.sg. Our manager will get back to you as soon as possible. Or you can drop us a message here and our manager will get back to you soon.
Alternatively you can call us at +65 6899 6188. Or visit our office at 2 Jurong East Street 21 #04-01A/B IMM Building Singapore 609601. The nearest MRT station to us will be Jurong East Station.