SME loan in Singapore are typically short-term unsecured loans with maturities ranging from 6 to 24 months, and they are typically repaid at the end of the loan period or renewed.
When looking for the best short-term business loan in Singapore, it can be difficult to choose from the many loan options available. Here we review some of the top lenders who provide small businesses with fast cash.
What is a short-term business loan?
Short-term business loans are unsecured and repaid over a period of 6–24 months. It allows businesses to borrow cash upfront to cover expenses until they generate revenue.
Depending on how much cash flow you have and how much collateral you have, you can borrow a short-term business loan, also known as a ‘bridge loan’, to bridge your business until you can obtain more secure financing.
Why do you need a business loan?
It is common for business owners to expect that their venture will be profitable from the outset, but the harsh reality is that not all businesses succeed immediately. You may want to consider taking out a short-term business loan if you have found yourself in a situation where your cash flow is not adequate.
You may also consider invoice financing, credit card cash advances, or personal loans when you need quick cash.
Should you get a short-term loan?
You might consider a short-term loan for your business if you need to make a large purchase that cash flow won’t allow you to cover right now, but might be able to cover in a few months if you accumulate enough business.
Taking out a short-term loan isn’t going to be much of a help if you have a business that has more predictable cash flow.
Since short-term loans have to be repaid more quickly, it might actually make your cash flow less predictable.
Consider a personal loan instead if you are having trouble paying back your short-term loan or don’t think you can afford the interest charges.
How to find the best short-term business loan?
Finding a short-term business loan can be difficult, but you can find one by networking with other people in your industry and taking the time to find a lender who you can trust.
In addition to online lenders, you can also consider private lenders, although be aware that they usually charge higher interest rates.
Additionally, you might be able to obtain a short-term loan from your local bank or credit union. The interest rates will need to be determined, and if your business can afford them, before applying for a short-term business loan from a private lender. These are often easier to obtain than a short-term business loan from a private lender.
You need to understand your options before you apply for a short-term business loan.
Check out: When to consider a Licensed Moneylender for a Financing Option
When you apply for a short-term business loan, here are a few things to keep in mind:
Minimum repayment
Prepayment penalties may apply if you are not able to pay the full amount each month.
Finance fee
Depending on the interest rate, the finance fee increases.
Term of the loan
Loan repayment period.
Learn how to apply for a SME loan in Singapore.
You have other options for getting capital for your business if you cannot get short-term business loans, or if you just don’t want to. You can also get a line of credit, which is typically offered by banks as an alternative to short-term loans.
You’ll receive a set amount of money, and then you’ll be able to borrow it whenever you need it.
A line of credit can be used completely, or you can leave a portion unused if you want to save it for later. Crowdfunding is another option worth considering.
Despite the fact that crowdfunding isn’t technically a loan, it can be a quick and easy way to get close to the capital. If you have a great network of friends and family that are willing to invest in your business, that can also be a good option.
Also, check out this guide: How do I check if a lender is licensed in Singapore?
Summing up
An important, yet an expensive piece of equipment or software may not be able to be purchased with your regular cash flow, so short-term business loans can be helpful.
Getting a short-term business loan will require fast repayment, either from cash flow or interest.
Make sure to shop around and learn the terms before signing up for a loan.
It is important to choose the right business loan when you need cash in a hurry. Although there are several types of business loans available, it is important to choose the one that will be the most beneficial to your business.
A short-term business loan that is tailored to your exact needs and offered at an affordable rate is the best short-term business loan.
Check out the best business loan in Singapore.
