Different Bank Loans For Business Owners
When any business owner is looking for debt to finance their business, there are many sources out there that they can turn to. You don’t necessarily need to pinpoint the exact type of loan for your business before you approach a lender. They may include banks, commercial lenders or your personal credit card. However, ensure you have some general idea and knowledge of the different types of loans available. With this information, they will help you decide on the best type of financing for your needs. Lenders generally structure loans and other form of debt financing with common variations. These may include:
1. Line-of-credit loans
This is the most useful type of loan, particularly for small-business owners. It protects the business mainly from emergencies and other stalled cash flow. They are intended for purchases of inventory and operations cost, but not for purchases of equipment or real estate.
2. Installment loans
They are paid back to the lender with equal monthly payments that will cover both principal and interest. They may be written also to meet any type of business needs. You will receive the full amount of debt after the contract is signed. The interest is then calculated to the final day of loan payment.
3. Interim loans
Bankers are mostly concerned particularly with who will be paying off the loan. Also, they want to know whether that commitment is reliable or not.
4. Letter of credit
This is a document used in international trade that allows entrepreneurs in the business to guarantee payment to suppliers in other countries. For a specified period of time, the document substitutes the bank’s credit up to a set amount.
When you’re applying for any form of debt financing, it’s always an important role to know what these lenders are looking for in your application. The application must convince your lender at all cost that you’ll pay back the loan as promised. Your managerial ability must show a profit-making partnership considering banks are in the money-lending business. Therefore, they need evidence of security and stability. Also make sure your application is complete.
There following items should be included separately in every loan application. Ensure that many of these items you include are part of your business plan. These may include:Cover sheet – This is the title page for your book and should include the date and your business telephone number.
1. Cover letter
It’s a personal business letter requesting consideration of your application. Ensure to describe your business indicating what your future plans are.
2. History and business description
Describe the legal form of your business and its location. Also mention your future plans and you believe the business is going to succeed.
3. Management team
You can list each member’s name and responsibilities in the business describing what makes the member the right choice for that job.
4. Financial history
Bankers will want to see your balance sheet statements of profit and loss. They will want to compare these two norms in your industry.
By listing your available collateral, demonstrates your banker will look for a backup repayment source. They may include cash reserves, home equity, equipment, inventory and stocks or bonds.
6. Personal financial statements
To any loan the bank makes, you’ll need to add your personal guarantee.
Is your business in need of cash? Need money to settle some of your suppliers or outstanding bills? Unable to get a loan from the bank? Best Credit SG Pte Ltd is a legal moneylender in Singapore and will be able to help you with that. We are the best money lender in Singapore. Our low interest rates, great monthly repayment plans and instant approval will be able to provide you with the money as soon as possible.
If you need a loan, feel free to contact us at +65 6272 5538 or visit our office at Blk 372 Bukit Batok Street 31 #01-374 (Level 2) Singapore 650372.