Every business requires sufficient amount of capital to help fund their expenses and invest in the expansion of their business. Most companies will, at some point, take a business loan to help in such a scenario.
If you are looking for a business loan in Singapore, you will find many willing money lenders but the important question is how to choose the best lending services as not every business loan may be right for you. Avoid the confusion by carefully considering what you need from the business loan. Here’s a look at 5 factors to consider before choosing an appropriate loan:
- The amount of money you need
The reason why you are looking for a business loan is that you don’t have the money you need right now. Thus, it is important to have an idea of the approximate funds you need. But, at the same time, you also need to be realistic about the size of your loan as the lender will consider it as a reflection of how well you understand business financials and your growth prospects. A loan amount that is too small or too big could be an issue. Therefore, choose an amount that suits your needs.
- The term / tenure of loan
Loan terms can differ from 6 months and up to 10 years, it is you who has to decide which one to go for. The long-term loan might sound daunting and comes with larger amounts and lower rate of interest. It is important to consider that they are usually offered to businesses with proven track records. The shorter the term of repayment, the higher the frequency of the payments to be made to the lender and vice versa.
- Hidden costs of the loan
When comparing the options, most of the people just look at the interest rate to determine the cost of loan. However, you should also ask the lender about the loan’s annual percentage rate along with additional charges such as origination and loan processing fees to get an accurate estimate of the total cost of the loan.
- Expediency of the process
When it comes to business financing, getting quick cash can have unexpectedly expensive costs. The faster you want the capital, the higher the price. If you are in a position to wait for a few weeks or months, you will be able to find multiple options that can offer loans at more affordable rates.
- Reason for loan
It is important to determine the reason for loan such as a one-time purchase, meet recurring expenses or a cash cushion for the emergency. There are plenty of options, so explore thoroughly and make the decision wisely.
Explore the web for more information on how to choose the appropriate money lender in Singapore for your business with affordable interest rates and repayment terms and conditions that are feasible for you.