Most businesses have a large number of expenses and often their customers may not pay them on time. In other cases, they may not have sufficient orders. This can lead to cash flow problems. The business also requires money to pay employees and contractors who are working for them. Both established businesses and startups invest in machinery, tools, and property to increase revenues and reduce expenses. While some businesses are having sufficient profits and funds to pay all expenses and investments, most businesses will require a loan. Since the business would like to get the best deal possible, paying the lowest interest some advice to compare business loans and get approval quickly are discussed.
Eligibility
While both banks as well as money lenders are offering loans, businesses should be aware that they may not always be eligible for the business loan. Specifically the more reputed banks have very stringent criteria for approval of the loan. They will only give a loan to businesses whose annual revenues exceed a specified amount and have financial records available for the last few years. The banks may not give a loan to startups or businesses which are making a loss. So the business should be aware of where it is eligible for the loan before comparing the options available.
Interest rates
The interest paid on the business loan is a major expense for the business, so most businesses would like to take a loan at the lowest interest rate. Typically the banks, especially if they are getting some subsidy from the Singapore government, will charge lower interest rates for the business loan. For example the SME working capital loan of up to $1 million for local companies to improve their liquidity is offered by local banks collaborating with the Singapore government. The interest rates for this loan will be lower than what money lenders charge, however, not every business will be eligible.
Processing time
In some cases, like for investment in expensive machinery, the business can afford to delay the investment for some time. However, for cash flow, paying business expenses especially salaries, the business will require funds urgently. In these cases, it may not be able to wait till the bank processes the loan application, which may take a few days or few weeks depending on the loan amount. So when the business requires funds urgently, it is advisable to compare the offers from the different money lenders since they are likely to process the loan application faster.
Comparing loan offers
Though the business owner may not be very sure who will give the best deal for the business loan required, it is advisable to get a quote from multiple sources. The business should decide the loan amount it requires, the repayment period, whether it is offering any collateral, and keep the financial data ready. There are websites, which provide quotes from different banks and money lenders which the business owner can use to compare the loan terms and conditions, interest rates to decide which is the best option for the business.