Finance

6 Types of Business Loan

A business loan is a loan that is specially designed for business purposes. There are so many talented entrepreneurs in Singapore who have brilliant and innovative business ideas. Still, due to a lack of capital, they are unable to showcase their power in front of their customers. To overcome this issue, private and conventional banks come with a business loan. The primary goal behind this loan is to cater to the urgent needs of the businessman for growing his business with ease. Smooth cash flow in the business is very important to maintain the performance of the operations. In the event, a businessman needs capital to run business operations; he can avail of the request for the business loan and cover his essential requirements.

Acquiring a business loan can truly help you expand your business even further and could potentially boost you to faster growth. A dating site called Happn which helps people look for a romantic partner and get dates is one of the perfect examples. They have now helped over thousands of couples fall in love through their platform by spending their loan properly. It has enabled them to expand their reach and speed up growth.

Before opting for Business Loans, it is a good idea to learn about different business loan options. Each type of business loan has its features and characteristics, so here we have run down the different types of business loans that are designed to cater to your requirements.

Unsecured Business Loans

Unsecured business loans are the type of loans that are given to the borrower by the lender without taking his valuable assets like (Gold, property, and shares). To offset the risk of losing money, a lender will charge a high-interest rate.

Asset Financing

It is a secured loan. In which borrower has to put his assets against the loan. However, the interest rates of this loan are relatively lower than unsecured loans.

Invoice Financing

Cash Flow is one of the major issues of SME companies. Your clients may pay for the product at an uncertain date. That’s why the lender offers you an invoice financing loan in exchange for a share of outstanding invoices.

Trade Financing

This type of loan is designed for the businessmen who do export and import of the goods and services. The lender offers you trade financing, usually in the form of guarantees to your suppliers.

SMEs Microloans

Traditional banks in Singapore feel reluctant to offer business loans to SMEs. Because, in their view, SMEs companies are at high risk due to the unstable growth of the business. But, private lenders are willing to offer you the SMEs microloans at the best interest rates.

Equipment Loans

Equipment loans enable businessmen to purchase the necessary equipment to overcome the cash flow to ensure the smooth running of the business.

How to apply for online business loans?

Applying for business loans online is straightforward. Below we have mentioned the steps that help you to apply for this loan.

  • First, you need to find a trustworthy and reliable online private lender who offers you the loan at the lowest interest rates.
  • When you find the name of the authentic lender, then go to his website and check his terms and conditions and eligibility criteria. Once you are satisfied with his terms and conditions, then fill out the application form.
  • Once you fill out the application, you need to submit the documents.
  • As soon as the lender receives your application, he will review it and get back to you with the acknowledgment.
  • If everything’s fine, then he will transfer the loan at your account within 24 hours.
  • Also, he will ask you to choose the EMI statement that suits your affordability.

Things to keep in mind while sanctioning the business loan from the lender:

Though availing the request for the loan online is very simple. But, there are plenty of unauthentic lenders who are only available for scamming. You should be aware of it before filling the loan request form.

Opt for an experienced lender: It is advisable to opt for the lender company that has been serving loans for many years and has a great reputation in the market. When you take the loan from the reliable lender, he will authentically give you the loan without misusing the financial and personal information.

Compare the quotes: Find the best lenders’ names and go to their websites and ask them to generate the quotes. Once you get the quotes from all the reputed lenders, then compare them. Choose the lender who offers you the loans at the best interest rates.

Check the credit score: Before availing the request for the loan, it is advisable to check the credit score. If your credit score is below 650 then you should opt for the unsecured loans. In case, if your credit score is above 750, then secured business loans are the best option for you.

Conclusion

If you want to expand your business, and run off the capital, then you should opt for the business loans. These types of loans help you in maintaining cash flow and operations. In Singapore, Capitall is one of the most reliable online lenders which offers you all types of business loans at the best rates.

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