Having sufficient funding on hand when launching a startup is crucial for buying equipment and inventory, hiring new staff, renting operational space, or covering various other business expenses.

One way to do it is by getting financing through business loans for additional capital. However, it may be difficult for new companies to secure a business loan due to different reasons like limited cash flow, poor credit history, and so on.

Still, it remains possible to get a successful business loan approval when you know the various factors to avoid. This lets your business be eligible for a fast approval loan as long as you meet the criteria required.

Read on below for the four common reasons why your business loan approval may be rejected.

Incomplete applications

Unfortunately, one of the most common reasons small business loan requests are rejected is due to an incomplete application or missing backup material. Usually, you will need to submit a couple of required documents that will let moneylenders be convinced of approving your loan.

A corporate strategy, three to five years of business and personal tax returns, business direct deposit accounts, financial statement/projections for the business, and personal and business credit reports are among the supporting records most lenders will request. They would also like to see contracts, agreements, licenses, approvals, and corporate records that are relevant to your company. In other words, just ensure you have your paperwork done before applying.

Poor cash flow information

When determining whether or not to accept a small business loan, one of the first items lenders consider is cash flow. They want to know that you have enough cash reserves to finance not just your business costs, but also to pay back the loan and leave some cash in the account.

If the cash balance is inconsistent or you have seasonal slumps on a daily basis, lenders are more unlikely to approve the loan. Hence, to determine the amount of loan payment you can repay later on, take your net operating income and divide it by your total sum of yearly debt to work out your debt service coverage ratio. If your available cash resources is equal to your monthly loan repayments, you will get a ratio of 1. However, while it is acceptable, moneylenders prefer a ratio of at least 1.35 – which shows you have the financial ability to both pay your own expenses and loan.

Business is still in the early years

If your company is still in the early stages, you may not have enough credit history to apply for a small business loan. Likewise, moneylenders need sufficient information about your business to approve the loan, such as monthly business revenue.

As such, you should always ensure careful management of your cash flow when operating a business to increase the chances of instant loan approval. Likewise, note any crucial information that demonstrates your financial ability – such as recording expenses from a new supplier. This lets moneylenders have a clear idea of your credit card background.

Low credit score

When a lender considers the credit score to be too poor, it brings down the chances of securing a small business loan. Depending on the lender and the case, the golden credit score number can vary.

Even if your company has been in operation for a long time, your personal credit record is taken into account while applying for a small business loan. But at the end of the day, lenders need the credit report information to determine if the applicant is diligent in repaying loans.

Conclusion

With a small business loan, it can help greatly in easing the business setup process. Ensure you avoid these factors that can lower your chances of getting a small business loan. That way, you can kickstart your business smoothly.

Among the many financial solutions out there, personal loans are known to be easy cash loans that help maintain financial stability with ease. Moreover, as this type of loan doesn’t require any collateral and offers various uses, it allows individuals to have access to instant cash, without any restrictions on how to use the borrowed amount.

As such, whenever people don’t have enough funds in their savings, they will usually turn to personal loans to bridge over financially difficult times. In other words, it’s a meticulously planned and well-executed means of financing certain situations that some normally would not have the funds for.

Hence, one can use personal loans to fund different reasons; read on to find out what are the various uses.

Education expenses

A personal loan can be used to pay for educational expenses such as tuition and book fees. These are often tax-deductible, making them a great way for someone to get the education they need.

Moreover, personal loans offer much lower interest rates and don’t require any upfront charges as well. This allows students to repay the loan amount easier over time due to the low interest rates offered as compared to other financing options like credit cards.

As such, students can seek out personal loans to pay for living expenses while attending school, helping to ease the financial worries for parents.

Business funding

The other common reason for personal loans is serving as capital for funding a business venture. People often use personal loans to meet their immediate cash needs, as it can be used to cover late payments and does not require collateral.

As such, it allows you to have significant profits once you are able to repay the money you’ve loaned at the beginning.

Travel

Personal loans can also be used for travelling purposes. Particularly, it can be used for any purpose that makes travel possible – such as paying for plane tickets, hotel rooms, rental cars, and even daycare expenses when traveling.

However, due to the COVID-19 situation at present, it can be difficult to travel abroad for now; hence, calls for the alternative solution – staycations. Instead of using loans for the holiday trip you’ve been pining for – you could consider taking up a personal loan to fund your staycation.

Home improvement and remodelling

Home improvement and decorating is another reason for personal loans. While many homeowners know how to do basic renovations, many business owners do not have extra cash to invest in home improvements.

Additionally, once you’ve met all the criteria needed to apply for the loan – it’s also a fast approval loan that will provide you with sufficient financial assistance immediately.

With a personal loan, you will be able to hire a professional contractor, pay for materials, or cover the initial costs of a renovation.

Conclusion

Regardless of the purpose for financing with a personal loan, this type of loan can help in many different situations. Ensure you approach the right loan provider for your financial needs.

At times, debt may occur; especially in situations where you might need money to either finance your education or new house. Whatever the reason may be, how you choose to manage, it is all that matters.

The interest rates that come along with some of your debts can make it hard to manage. Here is where a debt consolidation loan Singapore comes in handy. This is a strategy that covers your debt in a single payment and offers you several benefits. For example, besides giving your credit score a much-needed boost, the interest rates are also much lower than you would have paid on a month-to-month basis.

Keep reading on for some of the benefits that come with debt consolidation and find out how you can make full use of them.

Lower interest rates

It goes without saying that most unsecured debts have interest rates that are high; a good example being credit cards. This has a significant impact on the amount you are required to pay each month. However, if you have a good credit score, you can quickly lower the interest rates by paying off the accounts with high-interest rates by rolling them into one account.

As such, the reason why a debt consolidation loan is important – it will ensure you pay less interest on your new account and give a better credit score; a major role in knowing how much interest rate you can expect to receive. Additionally, your credit score is also a key factor in deciding whether you can receive instant loan approval in Singapore.

Turn multiple payments into a single payment

Consolidating your debts makes paying them simpler. This is because the more extended period provided for directly affects the due monthly payments. If you have multiple credit cards, consolidating everything into one will ease your financial worries as you’re able to focus on one debt source instead of struggle to meet multiple deadlines.

Less stress

As said before, consolidating your debt into one account will help reduce financial stress because you don’t need to stress yourself trying to meet multiple deadlines. This enables you to take control of your finances because you only have to pay one account monthly. You can, therefore, very easily find yourself better placed financially and away from the financial burden.

Can improve your credit score

Credit score is what will determine your interest rates. Hence, debt consolidation loans come in handy as it will give your credit score a significant boost, which will financially impact you positively as your credit utilisation rate will reduce. This rate is derived by the amount you owe divided by your credit limit, which then plays an essential role in calculating your credit score.

However, seeing a temporary drop in your credit score after acquiring a new credit card should not alarm you since it is very normal and only short term. The long-term benefits on your savings on interest and credit score make it worth the short-term drop.

Pay it off faster

Credit card balances take years to clear. Fortunately, licensed money lenders take into consideration factors like your income, how much you owe, and your credit score. With this, you can easily come up with a comfortable repayment plan. For this reason, you can pay off your loan much faster any without any added stress on you.

Conclusion

Applying for a debt consolidation loan comes with various benefits – from improving your credit score to easing financial stress. Ensure you have engaged with the right moneylender to clear your existing debts easily.

Anyone desiring to own a comfortable home of their choice would hope to get a home loan approved. If you are new to taking up home loans, it is crucial to note that they are typically a long-time commitment. Hence, it is something that you need to put some thought into before diving into it.

By doing so, you would be able to attain a home loan to finance your home, and you would also be able to pay the loan comfortably without any worries. Hence, here are five essential tips that would enable you to get a fast approval loan for your home.

Work on a budget

Everything begins by having an idea and then setting a budget for it. When choosing a house in Singapore, a mortgage calculator is essential in determining the amount of money you can spend on the desired house. Take into consideration the amount of cash needed for property taxes, maintenance costs, insurance, utilities and furnishings.

It is recommended that you apply for the full loan amount to be approved so that you can cater it for additional expenses that you may incur along the way. Alternatively, you could also speak to a property agent to discuss the figures and come up with a sensible budget.

Saving up for down payment

Depending on the loan type and the lender you choose, your down payment can vary differently. For example, a HDB loan requires a down payment of 10% of the purchase price, while a bank loan will require you to submit a down payment of 25% of the purchase price. When you establish a monthly budget, you will be in a good position to save enough for your loan’s down payment.

Once you have known your budget’s strength, it is vital to initiate an automatic remission from your bank account or paycheck to your savings account. This is the easiest and convenient way to save on a monthly basis. Additionally, it is also effective and is one of the main ways many other homeowners are paying their loans monthly.

Look on your credit score

If you have a high credit score, you are in a position of being offered the best deal and instant loan approval on a home loan. It is an indicator to the lender that you can apply for a higher loan amount because of the financial history you hold.

To have a good credit score, have a copy of your own credit report to understand your credit profile. This is the beginning of taking measures and improving your credit scores. You can pay through any of the several portals available online to receive a report of your credit score.

Keep your financial documents in order

To apply for a home loan, you are required to have a set of financial documents you are to provide. When you have these documents in place, and in order, the process becomes easy and seamless. Also, remember to include previous few months’ pay slips, bank statements, tax returns and other relevant documents needed.

Use a loan calculator

You will find a loan calculator useful when you need to know the amount of repayable loan you can handle. You can find them easily online, and it can show you your proposed monthly payment in different scenarios. This can be set at a different price, interest rate, down payment and so on. This makes it easier for borrowers to figure out the amount of loan they need depending on their salary.

Some loans are relatively more expensive compared to others based on several factors. It is important to understand all the factors that determine the loan price to choose what is cheap and suitable.

Conclusion

Getting sufficient money for your first home purchase is vital to a comfortable start to embarking on a new milestone with your significant other, family or even friend. Ensure you apply for your first home loan properly by following the right steps.

Shockingly, the right actions such as applying for a new credit card or even paying off a loan can have a negative impact on your credit score. However, do not let this affect you since they are mostly temporary and easy to recover from. One way to see them is as if they are short term cons for long term benefits.

When your credit score drops, getting a fast approval loan in Singapore becomes a challenge. Therefore, you should know what actions typically cause a drop in credit score. Having such knowledge allows you to be one step ahead and in control of your credit score.

Hence, here are the 5 ways your credit score can drop.

You used your credit card for a large purchase

Your credit score is calculated using the credit utilisation rate. This rate is derived from dividing how much credit you use as compared to your available ratio. As much as credit cards are convenient in making these large purchases, it also increases your credit utilisation rate. A high credit utilisation rate gives loan companies the impression that you are under financial risk.

Therefore, it is recommended you keep the rate between 10% to 30% for the best credit score, and to secure an instant loan approval in Singapore. Another tip would be to pay your debt in full before the end of the billing cycle before making your next large purchase.

You closed your credit card account

This occurs primarily when the account you closed is an old account. Your credit score drops then because your accounts’ overall age will drop significantly, and it also lowers the amount of credit available. Your credit history length makes up for 15% of your score on FICO, which is why you are encouraged to build up your score from a young age.

After all, your credit account age significantly improves your credit score. However, if you are making payments from a credit card that’s no longer in use, you can get exemptions.

You paid off a loan

It’s known that clearing credit card debts will help to boost your credit score – but paying off loans in instalments like a student loan or mortgage does not have the same effect on your credit score as paying off a credit card debt.

In fact, it actually has the opposite effect as it will lower your credit score – this is due to you having one less credit account under you. Having a mix of credit shows that you have the capability to manage different debt types, which make up 10% of your FICO credit score. However, if you have the ability to pay off your existing loans; you should. Ultimately, your overall financial health is a lot more crucial.

Applying for a new credit card

When you apply for a new credit card, the issuers have to pull your credit score report. This will enable them to determine how much of a financial risk you pose before they can approve of your credit line.

Unfortunately, this temporarily takes a few points off your credit score which can last up to two years on your report. However, this is not an issue as FICO uses reports up to the past year while calculating your credit score. Moreover, getting a new credit card does help improve your credit score when you know how to use it correctly; through charging purchases as well as clearing them in full by the due date.

Missing a credit card payment

Your payment history makes up for 35% of your FICO credit score calculation. This makes it the most influential factor to consider when trying to increase your credit score. Missing a credit payment therefore has a direct and immediate impact on your credit score.

This is what most lenders frequently look at as it shows your financial risk. Your credit history and behavior after missing a payment are the factors that will determine how fast you can recover your credit score.

Conclusion

When it comes to your credit score, it isn’t just important to know how to boost your credit score; but to prevent it from decreasing as well. For starters, these are the few situations you should note and avoid in order to maintain an excellent credit score.