Small- and medium-sized business (SME) owners in Singapore will need business funding at some stage in their venture. You can use Singaporean business loans to grow your company, cover shortfalls in working capital, purchase inventory, rent, buy commercial real estate, or finance inventory acquisitions.
I hope this guide will give SME business owners the information they need to obtain business loan OCBC.
Singapore’s Requirements For Business Loans
Every financial institution in Singapore evaluates business loan applications from SMEs using a standard set of eligibility requirements.
The eligibility requirements are distinct from the standards used to evaluate credit. An SME may be qualified to make a business loan, but it may still be turned down if it rejects the credit evaluation procedure.
The Singaporean government wants to help SMEs by offering credit support and sharing the risk of company loans in response to the downturn brought on by the COVID-19 outbreak.
Basic Eligibility Criteria are to be registered and functioning in Singapore, have at least 30% local ownership (Singaporeans or permanent residents), generate annual group sales of less than $100 million, or employ less than 200 people as a group.
There is still a high degree of uncertainty inside the business environment, despite some forecasts cautiously optimistic about the year’s general business outlook.
If you previously sought a bank loan to finance the purchase of supplies or equipment for company business but were rejected, you may wish to consider why from the bank’s perspective.
Banks approach lending from the perspective of: How can we make sure we profit from this loan? Determining if they will accept your loan shouldn’t be difficult when you consider it this way.
Here is a quick summary of the numerous factors lenders (and relationship managers) consider before approving or rejecting your business loan.
What Kind Of Loan You’re Requesting
Keep in mind that the bank will probably charge a higher DBS loan interest rate because there is a big risk involved in providing unsecured business term loans.
The Assets You Possess
As previously said, banks will only consider offering you a bank guarantees credit facility if you possess something substantial to present to them in case you cannot repay your loan.
The Directors Of Your Business And Their Credit Standing
When applying for a working capital loan from a bank, you normally need to present five forms of paperwork. These include the Accounting and Corporate Regulatory Authority’s profile of your business, Credit Bureau Singapore’s (CBS) most recent director credit scores, the past two years’ worth of your company’s financial statements, the past six months’ worth of bank statements, and the past two years’ worth of notices of assessments for your company directors (NOAs).
It indicates that individuals owe more of it than they make if your company’s directors have extremely high BTUs. Your chances of getting credit will be lower whether they are also personally underwriters of the unsecured company term loan because the bank is more likely to think they won’t be able to pay it back.