OCBC Business Loan Singapore Guidelines

Taking up a business loan isn’t that easy. Business people should focus on establishing their business first. When getting a business loan, banks look into several factors. That includes the borrower’s credit score, years of operation and annual revenue. 

Banks do have different standards about business loans. But generally, the three factors mentioned are what are most likely they consider. 

Do you wish to take up a business loan and use it to build up your enterprise? Take time to read and discover what things you should consider before deciding to get a loan.

Important Things A First-Timer Should Consider When Getting a Business Loan

Are you searching for business loans? That’s what people usually do. We tend to look for things first before having a final decision, and that’s one significant step to do. 

If you have decided about getting a business loan, consider the following factors:

Always prepare for the process.

Do personal research about the process of getting a loan. Every financial institution has its own set of standards and policies. Review every bank’s or money lending entity’s standards of processing a business loan. Find which offers a quick car loan approval. 

Don’t make a hasty-research to avoid false expectations. The more information you get, the more variety of choices you get. Thus, you can see the differences in every bank’s products and services. If you think you’ve searched enough, it’s time to look for which you believe you can get a high chance of approval.

Always check your credit score.

The Credit Score is one significant factor why a loan applicant gets rejected or approved. 

What is it, anyway?

A credit score is a three-digit score earned from your credit history. Such history consists of your financial behavior, including the in and out of your cash flow. A borrower’s debt behaviour will also affect your score. Any delinquent records will also reflect on your credit history. 

So here’s what you should bear in mind: the higher the score, the healthier the financial record you have. While the lower score you get, the lesser loan approval you receive.

The main factor that boosts up a credit score is how well you manage to pay your debts on time. That helps you build excellent creditworthiness. Banks will welcome you to take loans in the future.

Determining how much loan you need and can afford to repay over time.

You must specify how much funds you need to borrow. Why? Let’s take this one common mistake of taking up a loan.

You borrowed a certain amount of money, yet, it wasn’t enough. What’ll happen is you might get more funds to meet what you need to settle in your business operations.

With such a scenario, you have to pay two different loans with different interest rates and terms. It’s like digging up new holes instead of filling them up, clearing your financial pathways. 

Better review everything that your business needs. Calculate how much funds you think would be enough to support your business. 

Gather all the necessary documents for your loan application. 

Gathering all the requirements is essential. It’s about organising all the needed documents so that you won’t miss anything. 

Ensure that all information in documents is accurate. You know, bank loan officers are professionals. They have ways of knowing which information gets distorted or not. The more precise information you submit, the better. 

If you’d ask me where will they use the documents? It will be their basis whether you are qualified for the business loan you applied for or not.

Things To Consider in Business Start-Ups 

Business startups are the most challenging phase a business owner will face. It needs deep planning where you should realise all critical factors that will help grow your business. 

Visualise your business’ goals. 

Visualising goals will motivate you and help you find ways to reach that point. In that stage, you create a business plan. Know first your business’ nature, and identify the best product or service to offer in society. 

Finding the perfect location.

Location matters! So you should look for the best spot for your business. Be sure to put up your business in a place that fits its nature.

Why? Well, take this one example.

You build up an all-meat shop in a place where vegans live. That won’t give you any profit because you sell meat where individuals don’t eat animal flesh.

If you are offering cleaning services, consider building up an office near big districts where busy individuals live. Professionals who are too busy working can’t make time to clean up their homes. Thus, a cleaning service business can provide help to them, optimising a work-life balance. 

Know your customers.

Research the demographics of your potential customers. It would help you know how your potential prospects look for information. You can also see their behaviour towards product purchase online. 

Determine your business legal structure.

There are different business structures: sole proprietorship, partnership, and limited liability company (LLC).

A sole proprietorship business is an entity owned by a single individual or a company. While in partnership, from the word itself, requires at least two owners. 

Lastly, you can choose to build a company owned by at least two individuals, up to 200 shareholders. 

Do the research and choose which of the three business structures you aim to have. 

Consider funding your business startup.

Building funds through crowdfunding can help your business startups. It is like gathering small funds from people to build enough funds that can help your business operations. 

It’ll be your resources where you can get access to when your business needs it. You can divide the funds into short-term or long-term purposes.