If you’re looking to start your own business, the first thing that you need to do is to secure funding. One of the best ways to do this is through business loans. With that being said, there are a number of different business loans to help you get started. Choosing the right type of business loan will go a long way when it comes to helping you get your business off the ground. To make things easier for you, here are four of the best business loans to start a business.
Non-bank lenders offer a valuable alternative if you're looking to start a business. Unlike traditional banks, they cater to individuals who may not meet the stringent requirements of financial institutions. They're known for their flexibility, with faster loan approvals, potentially more relaxed requirements, and even customizable repayment plans In fact, non-bank lenders such as Fazz and Funding Societies can have funds released within 48 hours. Other lenders like Validus can even have it done withing the same day, but a site visit may be required.
Digital banks have been incredibly useful for businesses, as it gives them access to full digital banking services without ever having to step foot in a bank. Aside from the many services that digital banks have on offer, individuals with business accounts can also apply for fast-approval business loans. These loans are often processed quickly with minimal paperwork, as they were designed to cater to businesses seeking capital in order to foster growth. So much so that they do not need bank statements for loan amounts less than S$30,000.
A personal loan is an unsecured loan offered by banks or licensed moneylenders. This means you don't need to provide collateral to secure a loan. You'll repay the loan plus interest in fixed monthly instalments over a set period. Interest rates, eligibility requirements, and processing fees vary between lenders, so it's important to compare offers and understand the Effective Interest Rate (EIR) to assess the true cost of borrowing.
Personal loans are a great option if you’re currently employed and looking to kick off your career as an entrepreneur. However, given that you’re required to provide proof of income, it’s best to apply for the loan first before resigning from your full-time job. If you are able to manage your finances properly, personal loans can be a great option when you’re trying to start your own business.
Secured loans require you to pledge an asset, like stocks, property or life insurance with surrender value, as collateral. In the event you cannot repay the loan, the lender has the right to seize the asset to recover their losses. The main reason to consider secured loans are the favourable interest rates. Secured loans typically offer lower interest rates than unsecured loans due to the reduced risk for the lender. Eligibility criteria and terms will vary among lenders, so it's crucial to compare offers carefully before making a decision.
Securing the right business loan is a critical step in turning your entrepreneurial vision into reality. Before making a decision, carefully consider the terms, interest rates, and additional benefits offered by each loan. Conducting thorough research and seeking guidance from financial experts can help you make an informed choice that aligns with your business goals. Remember, choosing the right business loan is not just about securing funds; it's about setting the foundation for a successful and sustainable entrepreneurial journey. This is why it’s in your best interest to shop around before deciding on a loan. Feel free to refer to our collection of resources on business financing.
If you’re looking to secure a business loan, Lendingpot has got you covered. Our loan agents are ready to assist you one-on-one to help you find the perfect offer for your needs. Register today to leverage our lenders for your corporate growth and stability.
Lina heads up all things marketing and branding at Lendingpot. With a keen aesthetic eye, she believes in the use of design to communicate with our SME community and aspires to turn Lendingpot into a household name. Out of work, she is an avid camper and appreciator of nature’s best works.
