Getting a business loan can be a confusing and daunting process, but it’s one you’ll need to navigate if you want to get funding to grow your business. Fortunately, there are many types of business loans available to small business owners, and they’re available from multiple kinds of lenders. However, you’ll need to know which loan product is right for your needs, and how to apply for it.
The wrong loan product could leave you high and dry as you wait for a lengthy application process to resolve. Consider what you need the money for and how soon you need it before you apply for a business loan. When you’re clear on your needs, you’ll be able to choose the right product to suit them.
Know What Loan Products Are Out There
There are multiple types of personal loan to choose from, each with its own advantages and disadvantages. There are so many different types of conventional and small business loans available that just choosing one can be a huge task in and of itself. The Small Business Administration (SBA) offers several loan programs for various business funding needs. The most common is the 7(a) loan, which can be used to fund equipment purchases or leases, buy or build new land and structures, purchase fixtures and furniture, renovate existing premises, provide working capital, refinance debt, or even start a new business. If you need to purchase real estate for your business, you can get a CDC/504 loan. If you need less than $50,000, you can take advantage of the microloan program. If your business has been affected by a declared disaster, you might qualify for the disaster loan program to help you recover.
The SBA doesn’t give out SBA loans, but it guarantees loans offered through lenders and nonprofits. Requirements are less stringent than they are for conventional bank loans, but application processing times are longer, so if you need money in a hurry, you should go for an alternative lender. If you have good credit and you can wait a few weeks for the money, you can apply for a conventional business loan from a bank, but you’ll have to convince the bank that the loan can help you grow your business and that you’re profitable and established enough to pay it back. Plan well for an Alloy Development SBA 504 loan.
Alternative lenders offer a number of different types of business loans with fast application and approval times. You can get a merchant cash advance on your future credit card sales or borrow against a stack of unpaid invoices. You can get a working capital loan, an equipment loan, or a business line of credit. Alternative lenders can approve your loan application within minutes and get you the money in days, so if you need funds fast, this is the way to go – especially if your credit score leaves something to be desired.
Know Your Own Needs
The right loan product for you, especially regarding sme loans Singapore, will depend on what you need it for and when you need the money. If you can afford to wait a few weeks or a couple of months to get your loan approved, then an SBA loan or a traditional bank loan might work well for you. Bank loans are best for borrowers with strong credit, but SBA loans have lower credit requirements. If you need the money quickly or have bad credit, an alternative lender can help.
Get Your Paperwork Together and Apply
No matter what kind of business loan you apply for, you’re going to need to submit a lot of paperwork. You’ll need to submit your business credit score and possibly your personal credit score, and you may need to put up collateral or give a personal guarantee. You’ll need to have been in business for at least six months for most alternative lenders, and at least two years for traditional lenders. You’ll need to provide documentation of your annual revenue, as well as a business plan and a loan proposal. And you’ll need to provide your articles of incorporation, business license, personal and business tax returns, income statements and balance sheets, and financial projections. You’ll even need to provide a copy of your resume showing the qualifications and experience that make you a good fit for running the business. Once you have your paperwork together, you can submit your loan application.
It’s not always easy to get a business loan, but there are plenty of options for small business owners who need funding. Get the loan that best fits your situation, so you can focus on running your company.
