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Higher chance of securing a bank loan to start your company.

Micro loans are essentially working capital loans, like an overdraft or line-of-credit.

The MLP was founded in 2001 to help SMEs face their financial hurdles by paving the way for easy financing. These financing are in the form of micro loans.Micro loans are recommended for SMEs because they flexible and easy to manage.


Overview
Loans of up to $100,000 for local SMEs with 10 or less employees.

Use of Funds For daily operations or for automating and upgrading factory and equipment
Maximum Loan Quantum $100,000
Interest Rate * Minimum 5.5% interest rate for loan tenure of 4 years and below
Criteria Employ 10 or less employees
Risk Sharing Govt. 70% : Bank 30%

Money is a funny commodity. Banks are not going to give you a bank loan based on nothing. Why should they when you have little assets, zero track record of success, and an unproven business plan? In other words, financing start-ups are very risky for banks. Hence, the first thing you ought to do is plan how you can pitch the viability of your business. This will prove to the banks why you deserve their loan. By preparing the following items, you will have a higher chance of securing a bank loan to start your company.

  • A business profile from ACRA
  • Your bank statement
  • Cash flow projections
  • Profit and loss statements
  • Audited balance sheets
  • Personal income tax assessment of all owners and directors
  • Presentations of your business plan
  • Any other supporting documents to show that you are creditworthy, such as large purchase orders.

Thus, maintaining proper book keeping and accounting records is very important in obtaining a bank loan for your company. Alternatively,you can also seek professional accounting and bookkeeping services to help maintain proper books for your company.

Be Sure Of Bank Charges

It is common knowledge that banks make money in many different ways, and one of them is through the fees that they charge their customers. Thus, it is essential that you are crystal clear on the fine print of charges you are subjected to when you apply for your bank loan.

Maintain A Stellar Credit Rating

Since your start up lacks credit history, it is your personal credit rating as a business owner that will be scrutinized by banks before sanctioning a bank loan. In fact, the smaller the size of your business, the more intensely you will be evaluated on your experience, knowledge and overall character. Pumping in some of your own cash into your start up can also help to increase the likelihood of securing a bank loan.

Identify Your Company Future Needs

 You cannot afford to be myopic on the needs of your company in the future when applying for a bank loan. Banking needs you may not need for your startup now may become vital as your business leaps onto dynamic growth. Similarly, you may be content with just online banking services now, but not when your business needs a more interpersonal approach from a relationship manager in the future. One way to avoid such problems in the future is to identify your company needs, and then select the banks that provide the best service to match those needs at the lowest costs.

Fifth Consultancy Pte Ltd.
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