Getting a loan is a daunting task. It requires us to take time and prepare to prove our requirements and outcomes to the financial institutions to trust us. A lot of information has to be provided for this sake.
And even after all this, there is a lot of possibility for our loan to be rejected. It happens with small businesses as well as large businesses. So, in this article, certain tips are shared to improve the chance of getting a loan.
Have an explanation for the money
When you are in the requirement of the loan, you will have to explain your need for money to the Best Money Lender Singapore. It will formally need a business plan and an in-depth explanation of your exact plan on the available money. Not stopping with this, you should also assure them how you can pay back the loan amount along with the interest in a specified time.
Know the documentation you need
Lenders like Lender SG in the market are different from one another. Starting from the application process to the approval of the loan every process is different. Some lenders will need a load of information by others only require minimal information.
There are some lenders like the Best Money Lender Singapore who can process the loan in hours. Others take weeks and sometimes even months. However, all these are directly related to the type of business you run, the profit from it, and the age of the business and so on.
Take care of your credit score
Business and personal credit scores are very important using which the lending institutions will weigh your credibility. Credit scores are one of the most influential factors for getting the loan approved. If your business is new, you would have not got a chance to establish your business credit score. The next option for the lenders is to look for your credit score.
You should convince them that you can pay them on time. You can set automated payments so that you never have to convince them again. If there is a way, clear other pending of borrowings so that your utilization rate can increase. You need to nurture the credit score with dedication and patience.
Mix the credit to a harmless degree
This is another area of your credit score where you have scope to improve. If you have experience in dealing with different types of credit is a preferred qualification. But do not open accounts just for this sake as it is not going to help you in the long term.
Building a healthy business
Apart from the credit score, the lenders also want to see your business’s gross monthly revenue and overall health of the business. They have to know whether your business is capable of generating a solid cash flow.
For this purpose, you have to prevent drying away from funds and find ways to increase your revenue. You can increase your customer base; introduce innovations to attract prospective customers, etc.
Get the time machine
The age of your business is directly related to the amount of data to analyze. Generally, the lender will require data for 6 months to the minimum. Depending upon the amount of the loan, the data requirement can also extend to 2 years. Young businesses indeed have fewer options but there are other alternatives available like start-up loans, crowdfunding, etc.
Choose the right lender and the product
Financial products are available in massive numbers and in the same way lenders are also available in great numbers. It is really important to spend time and choose the right financial product and the lender. It may sound to be a tedious task but there are technology aids to help you out. There are platforms where you can find out the exact match by just filling in some information.
It is beneficial in the long run to hire a certified public accountant (CPA). You can go over your financial history with his/ her help. When you can submit the lenders your clean financial records, it will be a chance for you to increase their faith in you. If you have had profits, then you can touch the next level.
It is common for the local small banks to understand the situation of small businesses. The possibility of them helping is more. Besides this, different local branches specialize in particular business sectors. So, do not ignore the local banks.
Approach multiple lenders
Do not hesitate to have discussions with as many lenders as possible. Doing this you can know the wide options available to you. Even if, most of them reject your application, there will be at least a few lenders like Lender SG who will accept your application.