Regardless if you are a cautious neophyte or a seasoned tycoon, you can expect to encounter financial challenges while running your business at one point or another.
This is especially true for businesses operating in highly progressive countries like Singapore.
Fortunately, a micro loan in Singapore can come in very handy.
Benefits
While micro loans offer a lot of benefits, below are some of the key advantages it provides:
Fixtures or Furniture
For those business owners engaged in the retail or restaurant business, they can turn to micro loans to purchase décor, furniture, and other fixtures the retail space can use.
They can also use the fund to buy office furniture and fixtures.
As a general rule of thumb, it would be best to use micro loans for projects that will significantly enhance profitability and improve customer experience as opposed to merely enhancing aesthetics.
Supplies or Inventories
Business owners running a retail business can also take advantage of a micro loan in Singapore to buy production materials, supplies, and other items the business needs.
Many entrepreneurs consider this kind of loan to be highly advantageous as it provides them with both the opportunity and the luxury to increase profitability.
Equipment or Machinery
Bakeries, restaurants, manufacturing companies, and other similar ventures can use money from micro loans to get their hands on machinery or equipment needed by the business.
Other entrepreneurs engaged in other lines of business can utilize the money to purchase IT equipment and computers.
Working Capital
Are you looking to hire new employees but you lack the necessary funding?
Are you currently in need of additional money to fund the day-to-day operations of the business?
Getting a micro loan in Singapore would be your ideal option.
Regardless if it’s for basic expenditures or other working capital needs, the funding you can get from micro loans can definitely help you out.
Approval
If you want to improve your chances of getting the nod, it would be best to keep the following tips in mind:
Ensure your credit report is accurate.
Prior to handing in your application, consider it a must to check if the information and the figures reflected on the credit report are correct.
Check and see if there are also balances that are reflected as delinquent even if they have been taken care of already.
You should also look for accounts that have been linked to your name by mistake.
Ensure you are able to thoroughly check everything so you are assured everything reflected in the credit report will not mislead likely creditors as to your true creditworthiness.
Consider offering a personal guarantee or collateral.
For business owners who can’t offer any collateral, offering to sign a personal guarantee would be the next best thing.
A personal guarantee will give the creditor a permission to seize investments, personal savings, and other assets in the event the borrower won’t be able to make the payments agreed upon.
While this setup might seem risky, it actually is not the case when you really think about it.
For starters, micro loans often only involve a small amount so it won’t be as risky as signing a guarantee that will involve hundreds of thousands of dollars.
Ensure your financial documents are prepared.
Understandably, before creditors grant a micro loan, they would need to be sure borrowers would be able to repay their obligation.
That being said, borrowers are often required to present the necessary financial documents like balance sheets, reconciliation of net worth, and income statements among other things.
In addition, financial documents to be presented should not be more than 90 days old.