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Business Financing No Personal Guarantee

Business Financing No Personal Guarantee – Business and Career 5 reasons why SMEs in Singapore should consider taking out a business loan The best time to take out a business loan is when you don’t need it at all.

This article was written in collaboration with OCBC Business Banking. All opinions in this article are independent opinions based on our research. is not responsible for financial losses resulting from transactions, readers are encouraged to do their own thing. You can find the full editing guide here.

Business Financing No Personal Guarantee

Small businesses are the lifeblood of many households. Singapore is no different as SMEs make up 99% of all businesses and 70% of the country’s workforce. However, statistics show that non-profit SMEs – which make up 1% of the remaining businesses – contribute to 57% of Singapore’s gross domestic product (GDP).

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However, we can remember that most successful businesses come from small beginnings. Most MNCs started small at some point. Indeed, Trade and Industry Minister Chan Chun Sing challenged local SMEs to think of themselves as “Singapore’s new MNCs” with bigger ambitions.

To grow your business, you must invest your resources – including time and money – into it. However, your operating cash flow may not be sufficient to support your expansion plans or may limit your ability to accelerate. In that way, fundraising is a way to improve your business.

Although taking out an SME business loan can seem unfamiliar and intimidating, here are 5 reasons why entrepreneurs should consider taking one.

Most entrepreneurs are familiar with the TV series Shark Tank. Raising money from investors is one way to finance your expansion plans. But, as you can see on the show, you have to give up a fair part of your company to pay for the loan, especially if you are not profitable in your negotiations (for example, many investors compete to invest in your company) .

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Raising funds from investors means bringing new shareholders to your table, and potentially executives to your board of directors, to manage and collaborate with. This gives both advantages and disadvantages.

Equity investments are different from debt, where you don’t pay interest on the loan. However, that doesn’t mean there is no pressure. In fact, you will have new shareholders and existing shareholders with you on how you will use the money raised. Make sure you are using the funds to grow the business, because it affects the value of their shares in your business.

By taking out a loan (for example, taking out an SME business loan), your credit scores will increase. However, there is no change in the capital structure of your business and the size of the company you own. For this benefit, you have a financial obligation to pay the interest and principal regularly.

As your business grows, you’ll want to strike while the iron is hot. This means two things: a) building momentum rather than delaying/delaying and b) responding quickly to business opportunities when they arise. Doing so requires a large upfront investment in equipment, property, or inventory, or financing to purchase large inventories or raw materials at discounted prices.

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Taking a business loan from a bank is one of the fastest ways to raise money. For example, OCBC claims that the application process for a business loan can be done in less than 5 minutes through MyInfo or MyInfo Business and the loan can be approved in 1 day work.

Likewise, you may identify a commercial property that will be part of your expansion plan or just part of your plan to place your business where you are. Whatever the reason, this is expensive. A commercial property loan can provide up to 80% of the purchase price or value of the property. The loan takes up to 72 hours before approval.

Sometimes you think about putting your savings into a business. One reason, as mentioned above, is that you can find business opportunities. Another reason is that a recession, such as the economic impact of COVID-19 in 2020, will dry up business and cash flow at the same time.

If you put your savings into a business, you can access a large financial safety net for you and your family. First, you may not have enough savings to cover personal contingencies, such as the death of a family member or an accident. In this situation, you will have to dip into your own savings – now depleted – to pay for medical treatment and sustain the short-term loss of income.

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Over 43,000 businesses will close in 2020. While no one wants to lose their business, unfortunately these things happen. And if you do, you can access your savings to support you and your family until the next time.

By taking out a business account, you can manage that situation, whether it is riding the wave of expansion or confusion in the uncertainties of migration, without combining personal accounts and business finance. However, it is worth noting that for many business loans a personal guarantee is required to guarantee the loan, and the owners of the company may need to guarantee the loan.

Upgrading and repairing the original equipment will keep it working at its best. Of course, buying new equipment can also improve efficiency or fit into your expansion plans.

These expenses are capital expenditures that can reduce the cash flow of your business. Fortunately, you can use hardware and car finance to buy new equipment. For your day-to-day operations, including the maintenance of current equipment, and just enough cash to cover rent, equipment and fees, you can rely on an SME business loan backed by the government.

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There are also several special financing options for specific areas that you can use to set up your business location. For example, OCBC provides health care financing to medium-sized entrepreneurs who are setting up their clinics, including renovations, general working capital and acquisitions.

Of course, you can also choose to invest the cash flow you have in your company’s cash flow. However, this will add unnecessary problems to your business. For example, a downturn in your business can lead to an inability to pay bills and short-term liabilities. This can cause your business to suffer.

For short-term capital requirements, you can use trade finance solutions. This may include prompt payment even if your customers have not paid in full (through credit sales) and prepayment to the supplier even if you require longer payments (through credit sales).

Ironically, the best time to get a business loan is when you don’t need it. This is because your financial position will be good knowing that you can repay the loan on time each month. By doing this, you will create a better view of your credit status.

Steps To Getting A Small Business Loan Without Collateral

Even if you don’t have the ability to expand and need a business loan, you can start with less. Because there are fewer situations than there is no experience.

When you need a loan in the future, there is no delay. This is because you are familiar with the loan application process. In addition, the bank will have more confidence in your ability to repay the loan you are applying for – because your company has built a track record of repaying your debts.

A borrower with a higher credit rating gets a lower interest rate. This is important when you need a loan quickly and don’t have time to shop around.

For businesses that are doing well, it may not be necessary to take on additional debt. But watching competitors take market share, or watch it, is a huge risk to your business. At the same time, taking on too many business loans can easily strain your business and increase the pressure on you.

Business Credit With No Personal Guarantee

As a business owner, it is your job to chart the course for your SME. To grow, you need to invest. However, most businesses do not have the internal financial resources to fund their expansion needs. Therefore, taking a loan is a good solution.

There are many types and features of business loans, and as mentioned, the government supports most of them. You can explore OCBC’s comprehensive set of business financing offers to find out what types of financing you need and how they can help your business succeed.

Enjoy fast access to funds and get loan approval when you apply online with OCBC.

For SMEs operating for just six months, you can earn up to S$100,000 with OCBC

The Questions Every Entrepreneur Must Answer

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