As a business owner, it’s not uncommon to require additional funds to grow your business, cover unexpected expenses, or finance new ventures. In such situations, a business term loan can be a valuable resource. In this article, we’ll take a closer look at what a business term loan is, how it works, and its benefits. We’ll also provide a guide to the application process, eligibility criteria, and the best-licensed moneylenders in Singapore.
What is a Business Term Loan?
A business term loan is a type of loan that is advanced to business owners in exchange for specific lending terms, such as interest rates. These loans can be used to purchase fixed assets like machinery, equipment, land, and real estate. In Singapore, business term loans are offered by reputable financial organizations like banks and licensed moneylenders. These loans are categorized into two: short-term loans and long-term loans.
Short-term loans are repayable within three years or below, while long-term loans are typically set for more than three years in terms of repayment. They can take as long as 20 years and are repayable monthly, quarterly, and half-yearly. Business term loans are known for their low-interest rates compared to other types of loans, making them an attractive option for entrepreneurs.
Benefits of Business Term Loans
Some of the benefits of business term loans for small business owners include:
Low-interest rates: Financial organizations often offer low-interest rates for business term loans, making them a cost-effective option for business owners.
Lump-sum payment: Business term loans come with a calculated plan for how the recipient will use the money, enabling the borrower to finance high-cost businesses.
Enhanced cash flows: Business term loans offer entrepreneurs financial freedom and stress-free cash flows as they purchase business assets.
Improved credit scores: When borrowers make prompt payments, they are bound to improve their credit scores, building a good reputation for future access to loans.
Predictable repayment schedules: Business term loans help business owners manage their finances by offering an opportunity to pay on a monthly or quarterly basis.
How to Apply for a Business Term Loan in Singapore
To apply for a business term loan in Singapore, the following requirements must be met:
Age: You must be at least 21 years old.
Income: You must have a minimum income of S$20,000 per year.
Credit score: You must have a good credit score, as evaluated by the lending organization.
Employment: You must be employed or self-employed.
It’s essential to evaluate the terms and conditions of the loan before settling on a lending organization. At Tradition Credit, we offer tailor-made business-term loans with flexible repayment options and affordable interest rates.
Best Moneylenders for a Business Term Loan
When looking for the best moneylenders for a business term loan, it’s essential to work with licensed moneylenders like Tradition Credit. Such organizations offer lower interest rates compared to most credit card loans, allow borrowers to borrow a large sum of money for immediate use, and help to improve credit scores when you make loan repayments faithfully.
Conclusion
A business term loan can help business owners access additional funds to grow their businesses or cover unexpected expenses. By offering low-interest rates, predictable repayment schedules, and enhanced cash flows, business term loans provide an ideal funding option for entrepreneurs. When applying for a business term loan, it’s essential to ensure that you meet the eligibility criteria and work with reputable and licensed moneylenders. If you’d like to check if you may be eligible for a business term loan, fill up our free loan application form for more details.