If you are a small or medium-sized enterprise (SME) owner in Singapore, chances are you would need some form of working capital loan at some point to tide your business over. Whether it is for day-to-day operations or for unexpected expenses, a working capital loan can give your SME the financial breathing room it needs to grow.
There are many types of working capital loans available in Singapore, each with its own set of benefits and drawbacks. To help you make the best decision for your SME, we have put together a list of the most popular working capital loans in Singapore, as well as their key features. How do working capital loans work?
SME Working capital loans are basically short-term loans with a term of up to a year, usually with a fixed interest rate. Unlike longer-term loans, the repayment period is not flexible and the loan will be due upon maturity. The loan is for a small amount, usually between $2,000 and $50,000. The rate of interest varies from company to company and the amount you can borrow will depend on your credit score and the value of your business. How does a business loan work?
If you want to borrow small amounts, for example for working capital, it is usually easier and quicker to get a business loan. Banks and other financial institutions offer loans of $5,000 to $250,000 or more. The lender will make money available as a lump sum or in instalments. The loan is for a specified amount of time, and you will have to pay back the same amount plus interest. The money is paid directly into your bank account and you don’t have to pay it back until the specified date.
The lender will charge interest on the amount borrowed, but they may also agree to pay any interest due on a credit card or overdraft. The process is quick and easy and you can get cash within a matter of minutes. The loan can be arranged over the phone or online, so there s no need to visit a bank or money lender. Loan application is usually very easy and fast. To get the loan approved, you will need to provide your contact details.
Cash advances are designed for people with a bad credit record. Most lenders can approve your application even if you have a bad credit history. This is because of the high risk involved in lending to people with a bad credit history.
You will need to give your contact details, including your email address and telephone number. You also need to tell them about your current employment status. If you do not have a job, you will likely have to provide details of your income from another source. This is because self-employed people are often rejected for loans because the bank does not know how much money they will make in the current month. If you are self-employed and have a lot of cash flow coming in, then it is likely that your loan application will be approved.
For some loans, the bank will try to get an estimate of how much money you make per month. If you have a decent job, then you will be creditworthy. The bank wants to see that you are earning enough money to pay back the loan.
Income and employment status is also important because it affects your ability to repossess items if you default on payments.