Requesting a corporate/business loan for your business can bring you benefits without affecting corporate finances. The issue is not in whether or not to request a loan, but in how to use it to achieve the strategic goals of the business. When to request a loan is not a matter of opportunity, but of strategy. The ideal will be to consult with a professional business loan broker Singapore online, since he/she can lead you to the right choice.
Why applying for corporate loan?
The poor financial situation of the company can close many financing options and cause the company to accept an onerous loan that increases problems rather than a solution. The good reasons to request a loan for your company in a timely manner vary according to your strategic plans and can be summarized as follows:
- Open another branch,
- Expand the production plant,
- Buy machinery or equipment,
- Search for new markets nationally or internationally,
- Increase working capital.
The benefits received by companies that consider applying for a loan as part of their strategic planning are also several, including:
- Increase the flow of operations, giving rise to greater opportunities,
- Obtain liquidity to meet your financial obligations,
- Improve the credit rating of the company.
However, before making the decision to request a business loan, consider these factors: Is your business viable? Can you afford the cost of credit? Is your spending planning realistic? Is your reason for requesting a loan productive? It is always a good idea to hire the best business loan broker Singapore, and discuss the aspects that better serve your purposes.
Where and how to request a business loan?
Financial institutions are the main source of this type of credit for companies. So it is the first place to go, but you cannot go empty-handed and you must have a strategy that facilitates its approval. Not having this documentation may be reason enough to deny you financing. To carry out this evaluation you need time. Among the factors that you should analyze in business loan offers are:
- General conditions,
- Frequency and amount of payments,
- Interest rate and if it is variable or fixed,
- Possibility of renegotiation in the future,
- Penalty for advance payments,
- Amount of penalties for not making a payment,
- Type of guarantees requested.
What are the types of credits for companies?
Apart from financial institutions, there are other types of financing that your business can access. Government funds: the government wishes to promote growth in many industries. It allocates funds for this purpose through the Ministry of Finance/Economy. Seed-financing: it is the one that seeks to promote a company in its beginnings, from the development of prototypes to the market and feasibility studies. Angel investment: it comes from private investors who support companies’ already in operation and with a good chance of success through innovation. Risk capital: it is also given by private investors but they are motivated more by the return that the investment can offer. Private social capital: they are investment funds that invest in shares of very large and developed companies.