Tips on How to Secure a Microloan for your Small Business in Singapore

Microloans are helpful for any entrepreneur aspiring to set up their small business in Singapore. Small companies are useful in boosting Singapore’s economy and great for new entrepreneurs to grow in the market. Thankfully you can approach licensed money lender in Singapore to help you with your microloan. Here are some tips to help you jump start your small business,

Always Approach a Licensed Money Lender

The stakes are high for this one, and as much as possible, you want to make sure you approach a licensed moneylender in Singapore. There are many risks involved if you do not contact an accredited moneylender such as fraud. Your endeavor to start your small business may fail, and you may incur some losses if you do not choose the right money lenders.

There are various licensed money lenders you can approach such as financial institutions and accredited private individuals. These lenders will offer you a lot of options, and you want to make sure that the possibilities are tailored fit to the needs of your business, which leads us to the next tip.

Identify The Needs for Your Small Business

A common mistake some borrowers encounter is failing to identify where they will allocate the loan they borrowed, which creates a lot of problems. One of the issues that occur is a misappropriation of the money, which leads to them acquiring a new amount. Before you even apply for the loan, you should already start identifying where to allocate the credit.

If you haven’t identified where to use the loan yet, here are some examples which can help you determine your needs:

• Working capital of your business;
• Purchase of initial inventory supplies;
• Purchase of furniture and fixtures;
• Purchase of machinery and equipment; 
• Purchase of property or office space.

Determine The Criteria for Small Businesses

Many loan requirements for Small Businesses depend on what comprises a small business. Check with your local government whether you fall under this category. Many start-ups fail to identify appropriately their type, which often leads to their loan being denied. Here are some steps you should observe to check if you qualify as a small business:

• Check what the definition of small business is in your industry;
• Determine the number of employees and sales requirements;

Another critical reason why you should be sure with your qualification is the type of loan you can apply for. There are different kinds of flexibility and loan types which money lenders can offer, depending on the nature of your business. As a small business owner, you want to make sure you get the most flexible option which is tailor-made for you.

Prepare Your Personal and Business Documents

Most money lender in Singapore looks at similar requirements when applying for a Small Business loan. It is crucial that you already have some of the critical documents when you apply, or your application may be delayed. Here are some of the typically required documentation you should be prepared for:

• A government ID such as your passport, driver’s license, and tax identification number;
• Proof of income or any document which shows cash flow in your business. If you do not have this yet, you may also present a projected sales report.
• Recent financial statements of your business, including all your gains and losses. If you do not have this, you may present your financial report.
• Tax returns which show compliance with the government-mandated expense.
• A Collateral such as property.

Another crucial requirement you should never forget is your company’s business plan. You want to present your money lenders with a detailed description of where you will use the money, and how the business will be able to pay it off. This serves as a guarantee for them that you have created a direction for your company.

Whether you are new in business and regardless of the loan size you want to apply for, you want to make sure that you are ready for all the requirements. Small business loans are significant to help boost your business, and using the credit wisely can get you to where you want.