Sole proprietorships form an overwhelming majority of businesses in Singapore. According to the Accounting and Corporate Regulatory Authority (ACRA), more than 20% of all registered businesses in Singapore are either sole proprietorships or partnerships. That’s a whopping 158,000 businesses spread across our island.
Sole proprietorships are mostly small businesses owned and operated by an individual, and are not considered a separate entity from the said individual. Many cottage industries and artisanal businesses start out as sole-proprietorships, managed by one individual.
Despite the fulfilment that comes from running a successful operation,, there are many aspects of sole proprietorship that can be challenging, chief among them the availability of funds to cover operational and overhead costs. In response to this challenge, in this article, we’ll delve into several non-bank business loan options for sole proprietors.
Sole proprietors have the option to borrow from both banks and private lenders. However, non-bank financing options offer several unique benefits.
For example, private lenders do not subject borrowers to the stringent requirements so often common with banks. Borrowers can enjoy an enhanced level of flexibility in terms of loan approvals, quantum of financing, interest rates and repayment plans. In fact, some private lenders such as Funding Societies and FundTier offer loans from individual and institutional investors, with loans as low as $5,000 without the need for a collateral or guarantor.
Non-bank lenders offer several types of financing products, many of which are available for sole proprietors as well. It’s worth noting that not all lenders offer the same forms of financing, and there may be slight differences in their structure, requirements and conditions. Here are some of the non-bank business loan options available to sole proprietors.
Peer to Peer (P2P) lending is a form of direct lending, in which individuals and businesses are able to borrow money from lenders without the involvement of an official financial institution, such as a bank. P2P lending takes place on online platforms which are able to match lenders with their potential borrowers.
Several examples of P2P lending platforms in Singapore include Fundaztic and Validus. These platforms provide SME business owners with term loans, working capital loans, invoice financing and purchase order financing. Loan quantums range from as low as $10,000 but can go up to several million.
Some Business to Business (B2B) lenders have the licence to lend to sole proprietors, such as Affinity Financial Services. The main difference between these lenders and P2P lenders is that B2B lenders do not rely on a platform to match them up with borrowers.
Instead, they rely on their own platform or websites to reach out to lenders. Apart from sole proprietors, B2B lenders also finance larger businesses such as limited liabilities partnerships, private limited companies and more. They offer secured and unsecured loans to sole proprietors, and provide repayment terms and conditions that are more flexible than banks and larger financial institutions.
As a sole proprietor, you are considered to be responsible for all of your company’s liabilities. In short, any assets or debts you have as a sole proprietor are considered to be part of your business. As such, you are allowed to take and use personal loans for your business.
You have the option to apply for personal loans from private licensed moneylenders in Singapore. These lenders are more flexible in terms of their requirements, and will be willing to adjust their loan terms and conditions to suit your needs. Lendingpot personal offers you the convenient option of comparing personal loan offers from licensed moneylenders, so you can pick the loans with the most favourable terms.
As the saying goes, time is money. And when it comes to finding the best business loan options, time is necessary to compare and contrast loans to find the most favourable terms.
Lendingpot makes this easy: With a single application, you receive personalised offers to evaluate based on the needs of your business.
Register today and let us help take your business to the next level.
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.
