Business Loans: All You Need To Know
Suppose you are thinking about starting a business or already have an established one. In that case, you probably know the meaning and importance of capital for starting a business from scratch. Some use their savings amount initially, but most start with business loans. Business loans have made it easy for self-made individuals to start a business. Not only for starting a business but capital is also needed for the long run. Adequate amounts of funds act as a tool in the start-up business because every strategy needs to be executed carefully and that execution needs funds.
What Are Business Loans?
Startups require a sufficient amount of funds to grow. Even after growing, businesses need to be expanded to generate more revenue. Because of that reason, business owners apply for business loans that help them to grow and expand their businesses easily with the required amount of money. Fund also works as a tool for start-ups.
Your excellent idea and strategy must be executed due to your company’s expansion, and that execution needs ample funds to give a lead. The OCBC business loan is that borrowed capital with a fixed interest rate that has been taken from a bank or any other financial company. These kinds of loans are granted for commercial use. So these loans are also called commercial loans.
Different Types Of Business Loans:
Working capital loan :
Working capital loans are suitable for small businesses. A sudden shortage of funds can be covered up by this working capital loan so that the cash flow remains in balance. Working on a compatible loan is also appropriate for the time of high customer demand in the off-season.
Term loan :
The name is itself its meaning. Term loans can be secured or unsecured based on the company’s financial history. The term loan is a very common type of loan that can be taken for 1 to 5 years up to 15 to 20 years. These types of loans are taken for the company’s expenditure for a while.
Start-up loan :
These types of loans are for growing businesses. The business owner has comparatively lower experience. So, sometimes, these types of loans are secured because this type of company doesn’t have a good credit history. The applicant needs to apply for this type of loan with the required documents. The lenders review every detail of the company and then they decide whether or not he deserves to get the loan.
How To Apply For a Business Loan?
While applying for a business loan ocbc the lenders or banks must have some criteria that are needed to be met.
- The business has been registered and operated in Singapore for 2 years
- The turnover should not be more than 1 million
- Singaporean should own 30%
As we discussed earlier, a business loan is a tool for the budding business to grow and expand to generate more revenue. When you apply for a loan, read all the terms and conditions carefully because taking a loan either revives or abolishes your business. So, you must learn all the financial terms before applying for a loan.