According to a data recently released by Monetary Authority of Singapore (MAS) on May 2, 2014, consumers remain vigilant about their economic prospects. MAS discovered that in March, bank lending was flat compared with February. Business loans for the month of March mounted $360.5 billion or a 13.5% decline from February’s 14.6%.
Bank lending to different sectors (like construction, manufacturing, business and building) fell short in March. However, loans in other sectors (like financial institutions and general commerce) increased. Despite the decline, banks and other lending institutions remain positive here in Singapore. Loans are smaller but it does not mean that there is a slowdown when it comes to investment.
The figures given above will give you an idea of the banking situation here in Singapore. If you are thinking of applying for a business loan, you have to carefully deliberate it and make sure that your prospects are good to ensure success. Here are the things that you need to consider before applying for a business loan:
- Determine your credit score: You should know that you have a credit store. The score will describe if you are a good payer or not. If the score is high, you get better chances for loan approval. If your credit score is low, then you may find it difficult (but not impossible) for loan approval.
- Learn about your options: You have to scour the lending institutions this way you will know about your options. Lenders vary from traditional (like credit unions and banks) and non-traditional. You need to learn about the average rate, the speed of approval, payment scheme and many more.
- Distinguish what you need: You do not know how much you need to expand or start your small business. That is understandable but if you are really uncertain, you have to meet an accountant or an adviser so you will know. Avoid approaching lenders without an amount in mind. If you want to answer the questions of lenders, make sure you know your finances, business model and your future plans.
- Learn from it: If at first try you didn’t get it, you should learn from it. For example, you were turned down because of your poor credit score. You should see it as an opportunity to improve your score. If your score is better, you can reapply.
Once you considered the things mentioned above, deciding will be a lot easier. There is nothing wrong with loaning money for the expansion or start of your business but you have to be affirmative of its results. You can do this by developing your business plan and your financial statements as well.