How to Get Business Loan for Startups?

Preparing for Business Loan for you Startup

If you want to get a loan for your business, preparation is key! As startup owners, you should be fully prepared and strategic in presenting your business plans and experience. 

1. Start with your personal finances

In many cases, you will have to present your personal finances to obtain a loan. Your ability to manage your personal finances is a representation of your ability to manage your business finances. 

That is why it’s always important to keep your credit score high by paying your credit card bills and loans on time.

Check your credit reports and financial history and fix any issues before applying for the business loan. You need to make sure to get rid of any loopholes from your end that could cause the bank to object.

Whether it’s your first time applying for a business loan or not, banks are surely going to look through your financial history. All financial institutions will be interested in lending borrowers with several years of credit history and a good credit score.

2. Come up with a complete business plan

The only way to secure a business loan and gain the confidence of financiers is through a detailed business plan. You should lay down all your business goals, strategies, and ideas.

This plan should also include the description of the services and products you are dealing in and how you plan to market, sell, and make a profit out of them. One of the most critical parts of your business plan is describing how you plan on using the loan.

By doing so, you allow the bank to understand how your business works and they can better analyse the likelihood of you repaying your loans.

3. Showcase your experience

You must describe your professional industry experience in your loan application. This way, you can show that you have the required knowledge and skills to help your business grow. This  also increases your odds of getting your loan approved.

Along with your details, you can also submit the resumes of your core team members to further provide relevant skills, knowledge, and work experiences to increase the chances of securing the loan.

4. Pick the right bank

Take time to find out the different types of loans offered by various banks in Singapore; you might want to make a list of the loans that are suitable for your business. With this, you can identify banks and financial institutions that offer these loans. 

Next, you can contact the banks or look up online to know more about their eligibility requirements. If you qualify, you can proceed further and check the bank’s requirements, procedure, interest rates, operational history, etc. and go for the bank that suits you best.

5. Applying for the loan

Almost all banks in Singapore offer both online and offline applications for you to get loans. Many a time, you will have to head down to the bank to talk to a bank officer regarding your loan. Make sure that you are dressed well and are prepared for any questions that come your way.

If you have worked with a bank previously, be it a savings or checking account, you might have higher chances of getting your loan approved by them due to the relationship built. If your loan does not get approved, consider a credit line.

Considering a Credit Line

If you haven’t found a suitable loan type or your loan application gets rejected, you have another option to finance your business via credit. Almost all banks offer some sources of credit, such as lines of credit and credit cards. 

Financing your startup through a credit line has several advantages. For one, you can get the cash faster than traditional loans and also enjoy faster accumulation of reward points.

If you’re considering a credit line, you may want to explore neobanks (digital banks) like Aspire. It is the first of its kind in the whole of Southeast Asia and is currently serving small business owners throughout Singapore, Thailand, Indonesia and Vietnam. 

Through the Aspire Credit Line, you can enjoy fast and flexible access to working capital. And the best part about working with a neobank is that the credit application processing takes only about 24-48 hours, unlike the industry-standard weeks’ long process of traditional banks.

Furthermore, the Aspire line of credit allows you to drawdown cash immediately after your application has been approved, and you will only incur fees based on the amount you use.

Conclusion

Though the Singapore government continues to make efforts to encourage money lending to SMEs and startups in Singapore, the bitter truth is that it is still a struggle for many business owners to acquire funds and loans from financial institutions.

Getting a loan for your business in Singapore is not impossible, but it is rather challenging. In such a scenario, the next best alternative you can do is opt for a credit line.