There is nothing more exciting to an entrepreneur then starting a new business. Seeing the fruits of your labor and executing your passion is an excellent way to start each day. Unfortunately, all businesses require startup or additional capital when expanding. This likely means you need to acquire a loan which isn’t the most fun aspect of running a business but can be achieved through careful planning and work.
Prior to approaching the bank, follow this simple and practical guide on how to prepare to apply for a business loan. By following these instructions, you should be able to secure a small business loan in no time.
One: Bank Criteria
Different lending institutions have different standards but typically all banks require that the loan be for sound business purposes, you and your business partner have experience in the industry and are of good character and you have the ability to pay back the expat loan Singapore. Strong collateral and having a personal equity in the business helps.
Two: Required Information
Generally, banks need your personal and business credit history and financial statements, cash flow projections for a year or more, personal guaranties from business principal owners and a detailed business plan.
Three: Streamlining the Process
To make the process easier, select your lending institution wisely and carefully. Remember that large banks often shy away from small loans because they are less profitable but require the same amount of servicing. Approach banks that you are a customer of or have worked with in the past. Check out credit unions or local community banks. Also, speak with a lending officer first to determine required documentation and make sure to bring all requested documents.
Four: Standard Small Business Loan Amount
Although small businesses are available in all sizes, the median small business loan is between $130,000 and $140,000 with the highest at $250,000.
Five: How to Secure Financing
Start-ups tend to be the most difficult to secure financing. However, with a strong business plan, enough personal resources for investment and collateral, many community banks will consider lending you money.