More About Business Loan Rates

business-loan

Business loan rates are not set in the same way that other personal loan products are. They can vary widely depending on the Singapore licensed money lender; the borrower; and the loan amount.

There are two main ways to get the cash you need to grow your business:

  1. A small business loan from the Small Business Administration, a program backed by the United States government.
  2. A traditional bank loan

Both loan types are fine to use, depending on your circumstances.   SBA loans offered by the government are sometimes easier to get, but often come with tight restrictions and guidelines on how the money can be used.

Larger loans must go through normal loan channels.  This requires establishing a relationship with a high-end lender ad come with stringent guidelines.

Singapore business loanThe loan option you choose will also have a lot to do with the Singapore business loan you are quoted.  For instance, SBA loans generally sport a much lower interest rate. Why? Because they are backed by the federal government. This means that if the borrower defaults on the loan, the government will make those payments. This leaves the lender with no risk; therefore the interest rate is much lower.

Standard business loans often offer a longer repayment term, but this too can hike up the interest rate. Businesses with a poor credit rating and narrow profits may also be quoted a higher rate.  The stronger the financial outlook for a business, the lower interest rate a lender will generally require for a loan.

Whether you are looking at federally backed small business loan products or traditional loans from a business-friendly lender, the bottom line is that your interest rate will depend a great deal on these important factors:

  • Your Credit Worthiness.
  • Your Businesses Profit/Loss Statements.
  • The Length of the Loan Term.
  • Your Business Equity

The key to negotiating the best rate you can is to understand what can increase the rate on a specific loan, and what can help decrease it. That way you can position yourself in a manner that will ensure the best possible business loan rate available at the time you apply for your loan.