Getting a bank loan is not a simple task. You do not walk into a lending institution, apply for a loan, and wait until you receive your money directly into your account. First, you need to be able to convince the licensed moneylender or the financial institution why they should give you a bank loan, fast cash loan, or any other type of loan.

Here are 5 essential things a startup should consider before obtaining a loan.

1. Purpose of the loan

Before visiting a banking institution, you must be sure about the purpose of the loan. You must be able to present them a solid plan on how you will use the money, as well as a comprehensive repayment plan. Also, you should be specific on how much you want and the reason for that particular amount.

When borrowing money from a licensed moneylender, you should be well prepared before stepping into their offices. A few critical things your business plan should include is a financial statement, target market, and experience of the management team. The licensed moneylender will then evaluate the risks involved with the information provided.

2. A collateral

Many startup businesses do not have a history that they can use to convince a lending institution about the effectiveness of their business. If the borrower defaults, the licensed moneylender will resort in selling the collateral to regain their money.

Most financial institutions take property or assets as collateral. Should you default, the licensed moneylender will have no choice but to sell the property as specified in the agreement signed by both parties.

3. Capacity to repay the loan

Whether you are taking a consolidation loan or any other loan, the licensed moneylender will weigh the borrower’s ability to repay the loan. The financial institution will analyse the business debt-to-ratio and the amount of free cash flow. The reason why licensed moneylenders use these ratios is to provide a cushion in the case of business decline.

4. Need for capital

Financial institutes feel most comfortable when they know that they are pumping money to boost an already existing capital. Borrowing a loan with nothing at hand will likely yield no results. This is because financial institutes value how much they can give to a company.

One way of convincing a financial institution to offer you a business loan is to start with a small amount as a startup. That way, when the licensed moneylender sees that your business is making a profit, they will be likely to invest more.

5. Character is important

The character of the borrower is another essential factor you should consider. If you are dishonest or fail to give out the correct information to the financial institution, you will reduce your chances of getting a loan. You should give the licensed moneylender confidence by giving out the right information.

It is important to note that the reputation you build for your business and yourself will aid you in the future.

Conclusion

While lending institutions are interested in helping your financial situation, they are just like any other businesses that are looking to make a profit. This means that they also want to make a profit. Thus, they will want to put their money in a startup with fewer risks altogether. Consider all of the things above if you are looking to obtain a loan from a financial institution.

Starting a business or a company is not an easy task, especially when you do not have adequate finances. Even with the best business plan at hand, business financing is one of the most fundamental factors you should consider before anything else. There are several financing options available for both new or startup business owners.

The best financing options available in the market are by seeking funds from licensed moneylenders. However, not many have a good credit score to acquire a loan. Despite this, individuals with a bad credit score still have several options available to help them fund their startup.

Here are the 5 best financing options you should seek today.

1. Venture capitalist

A venture capitalist (VC) is a financing option in which you will exchange a percentage of your business for capital. The percentage of business to be given up is negotiable as it depends on the company’s valuation. A venture capitalist is a good option for individuals with a bad credit score and no collateral.

Apart from financing, a venture capitalist will bring in an abundance of experience in running a business as well as industrial connections. However, while a venture capitalist can help you to grow your business, excellent management skills are also essential.

2. Invoice financing

With invoice financing, a financial institution will help your business by paying off unpaid invoices. You are then required to repay the money once the customer has paid off their unpaid bills. This way, you can ensure that you will not run out of cash flow.

3. Crowdfunding

Another financing option for small business owners is through crowdfunding. Crowdfunding is where small business owners borrow money from several investors instead of a single investor. Seeking funds from a large group of investors can be advantageous for them as it allows for risk diversity across other high growth companies, making it a good option.

4. Convertible debt

Convertible debt is when you borrow cash from an investor with a collective agreement to convert the loan to equity later on. In this deal, you will be required to pay investors to receive a given rate of profit at the end of every year until a specified date.

The advantage of convertible debt is that it will not place a strain on your business cash flow. However, one negative aspect is that you will have to let go of some percentage of your business in the future.

5. Licensed moneylenders

The most comfortable and most accessible option is by borrowing money from licensed moneylenders. If you have a good business plan and a good credit score, you will be able to obtain a loan from licensed moneylenders.

If you have a bad credit score, you can still access an instant cash loan through collateral. The option of a guarantee can be helpful for individuals with an asset that is accepted by the financial institution. Once you complete repaying the loan, the asset will be returned to you. Should you fail to repay your credit, you will risk losing your asset to the financing institution.

Conclusion

A suitable financing method is important for any business to succeed. While there are many financing options out there, considering possibilities like a business loan or consolidation loan – you should not enter into an agreement that will hurt your business.

Working with the right financial institution or investor is also essential. Do your research well to ensure that you make no mistakes and grow your startup right.

No matter if you’re buying a house or paying for your education, debt can eventually pile up and lead to overwhelmingly large sums of monthly bills on your credit cards or loans – which can be challenging to manage. Even if you don’t mean for it to happen, it’s how you choose to manage your debt after that counts.

If you have too many unsecured debts on hand, taking on a debt consolidation loan is a possible solution to take. Let’s take a closer look into how this loan can benefit you.

1. Merges all your multiple payments into one

A debt consolidation loan simplifies the debt repayment process by combining all your unsecured debt into a single payment. Sometimes, it can result in lower monthly payments due to a longer pay off period, but this ultimately depends on you and your licensed moneylender or financial institution.

Suppose you’re one of those people who juggle with multiple credit card payments, merging it into a single repayment plan reduces the struggle from having to make various payments. Even then, your debt still exists, just that, you have one less thing to worry about. With that, you can now focus on paying off your debt to one source.

2. Lower interest rates

Most unsecured debts have high-interest rates that can make a significant difference to the repayment amount you pay every month. With a debt consolidation loan, it allows you to pay off the several high-interest debts and save money quickly. Once you have savings, you can feel more financially secure as you focus on repaying your remaining debt.

3. You can improve your credit score

When you focus on maintaining your end of the deal, which is making regular payments in full, you can gradually improve your credit score rating.

It can be through sticking to a financial budget or setting daily reminders so as not to forget. But if you fail to make a payment on time, it can impact your credit score negatively. In future, it’ll affect your chances at getting an easy loan approval.

4. Reduces stress

Just like how decluttering your space can reduce stress, consolidating all your debt into a single manageable payment can reduce stress and minimise the “clutter” from having to make multiple payments.

Financial matters like debt are no strangers to stress, but you’re always in control of your finances. You can stay on top of your single monthly repayments. Slowly but surely, you’ll have peace of mind and find yourself in a better position in terms of finances.

5. Having a fixed payment amount

With a debt consolidation loan, you can manage your finances better since you only have to make the same payment amount each month. In a way, you’re more mentally prepared each time you receive your bill since you have an expected amount to pay off.

Conclusion

The primary goal of a debt consolidation loan is to aid in making the repayment process more manageable. However, just like making any other financial decision, you’ll need to carefully evaluate your current situation to determine if taking this loan is the right step for you. Even so, there are many benefits, such as the ones mentioned above, which makes this a worthwhile choice to consider.

Are you swamped with multiple loans and various monthly bills? Chances are, your debts could be snowballing as you struggle with keeping up.

There are many solutions to resolve this issue, and one of them includes having money management skills. For instance, if you’re struggling with your credit card expenses, then you should close some of your credit card accounts or omit the use of credit cards altogether.

However, if you’ve accumulated debt from several moneylenders and you’re barely able to pay off the high monthly interest rates, then that’s when you should consider acquiring a debt consolidation loan. This works by having a licensed moneylender or financial institution pay off all your unsecured debts. After, you’ll just need to focus on making your repayments to them.

While it simplifies your debt repayment process, it doesn’t mean that you are debt-free. So, if you decide to take up a debt consolidation plan, then here are some tips to help you manage your debts effectively!

1. Be realistic about your repayment schedule

There’s nothing wrong with looking at the big picture: to be debt-free. But realistically, you’d also need to take into consideration the steps you’ll have to make as you work towards your goal. So, instead of opting for a higher monthly repayment sum to quickly settle your debt, think about your other financial commitments. This includes your day to day expenses, other secured loans and the like.

When you over-commit to a high loan repayment amount, you might end up compromising your ability to settle other bills. With that, you must be aware of your commitments so you can select a repayment schedule that’s sustainable in the long run.

2. Manage your monthly expenses

To be aware of your commitments is one of the most essential financial obligations, and this is when budget and financial planning comes into play.

List down your financial commitments before sorting it based on priority. If there are any expenses that you can do without, consider reducing or eliminating it.

To illustrate, ask yourself if having a car is necessary when you have an outstanding car loan. Perhaps, taking public transportation is better than owning your own vehicle. If you’re dining out, is there any way to cut down on dining expenses? If not, you can consider preparing your own lunch box meals!

These small changes may not seem like it’ll make a huge difference. But when you start mapping out your finances, it’ll be easier to ascertain what’s essential and what sacrifices you can make to be debt-free.

3. Be in control of your credit card expenditure

When you freely spend through your many credit cards, your bill will undoubtedly skyrocket. Even then, you can settle to pay for the minimum repayment sum. But sometimes, things can take a turn.

The late interest fees can go over 25% per annum if you fail to settle your credit card payments. Slowly, the amount will exacerbate, and you might not be able to pay off your remaining credit card debts.

Even though credit cards can benefit in terms of cashback and rewards, it’s better to have one card or none if you aren’t able to manage it properly. And if you still can’t control your spending with one card, then you might want to refer to your budget and reevaluate your spending habits.

4. Compare and select the loan package that suits you

Aside from comparing differences in interest rates across the various debt consolidation plans, you should also consider other terms such as the repayment period and late payment fees.

Take note that as you pay off your debt, you’re not only working towards clearing your debt but also, improving your credit score! So, if you ever need to take up a loan in future, the chances of getting an easy loan approval are higher.

You’d also need to factor in your needs and preferred repayment schedule before settling with your preferred licensed moneylender. But if you find yourself needing some guidance along the way, you can always contact us at Easyloan.com.sg.

As businesses began closing down amid the rapid spread of COVID-19, you might think that starting one now is a risky business. But like how every cloud has a silver lining, this might be your golden opportunity to emerge and capitalise on the new normal which arise during this pandemic.

For example, The Great Recession brought about a rise in the digital age. Well-known companies like Airbnb and Uber established during this period of time. These companies share something in common: the ability to think outside the box for solutions and opportunities that appeared because of the changing times.

With many mediums to start your business at, such as e-commerce, e-learning or even online companies, the sky is your limit! If you want to kickstart your business endeavour, here are a few reasons why you should attain a loan!

1. Build on your credit score

As a budding business entrepreneur, obtaining a large sum of a loan without an established history can be quite challenging. To put it into perspective, it’s like buying an item online from a seller with no reviews.

If you attain a short-term instant loan while making on-time repayments, you can work on increasing your credit scores. In future, getting a bigger loan would be of a slightly smoother process since you have a more credible “review”. You can also expand your network with specific moneylenders! Take note only to borrow what you can afford to pay back, though.

2. Flexible repayment options

When it comes to loan repayment, businesses tend to have more flexibility than when you’re repaying your loans as an individual. Primarily, this works in your favour as a start-up company because you might have insufficient capital to repay borrowed cash.

Usually, most businesses can repay their loans once every month. But if you’re venturing into the industry, you might have the option to split your payments to make it easier to manage with at the beginning. And once you have sufficient profit, repayment costs will eventually increase.

3. Settle start-up costs

In the quest to starting up a new business, there’ll be many factors that need to be considered, which includes research expenses, logistics, and the like. This is also known as start-up costs!

Rather than digging through your personal savings, obtaining borrowed funds to settle these costs would be much better. This is because you might stretch yourself too thin, and won’t have any resources to fall back on in case anything happens.

Hence, a business loan helps reduce, or even eliminate, financial risks that come with beginning a new operation. And if you have an outstanding amount of cash to pay, there’s always the choice of getting a consolidation loan.

4. Capability to increase workforce

Working at a start-up or small business isn’t necessarily equivalent to a one-person show. In fact, you might find yourself and your small team taking on many roles to cater to your growing business. Though it might work out at first, it might end up wearing on you and your business.

Keep your business ideas fresh and innovative by increasing your employee intake. It can be a great move if there’s a relationship between your revenue and hiring new talent! But if having too many talents dilutes your business vision, then it may not be a smart move to take.

Conclusion

There is a range of benefits to starting a business now. As the saying goes, when life gives you dirt, plant seeds. Similarly, this downturn provides both current and potential business workers with the opportunity to learn how to bootstrap to stay afloat.

With a tighter financing environment, Easyloan.com.sg would love to help enhance your journey, especially if you’re looking to obtain a fast cash loan to accelerate your business journey. For a fuss-free loan application process, give us a call if you have any questions!