Working capital is vital for SMEs, especially in times of uncertainty. We are here to help SMEs under pressure during these challenging times, to provide support with various financing measures enabling you to concentrate on the business at hand.
4 reasons why your business might require additional working capital
- Seasonal differences in cash flow are typical of many businesses, which may need extra capital to gear up for a busy season or to keep the business operating when there’s less money coming in.
- Almost all businesses will have times when additional working capital is needed to fund obligations to suppliers, employees and the government while waiting for payments from customers.
- Extra working capital can help improve your business in other ways, for example: enabling you to take advantage of supplier discounts by purchasing in bulk.
- Working capital can also be used to pay temporary employees or to cover other project-related expenses.
Why Might Your Business Loan Be Unsuccessful?
As you can see, there are many types of business loans available to SMEs in Singapore, and the government has even stepped in to ensure that funding is available to more small businesses. However, your business loan application may still be unsuccessful – and you will typically only find out after applying for the loan and waiting 2 weeks for it to get processed. Here are some possible “problem areas” when you are trying to secure a business loan:
Track Record
Getting a business loan if you have a fledgling business can be really tricky. Providers typically require your business be around for at least 6 months to qualify. Even if you are established, they may require proof of your annual revenue to lend to you. So if you are only just starting out, it may be difficult to get a business loan.
Business Ownership
Government-assisted financing is open only to businesses registered in (and present in) Singapore, who are at least 30% owned by Singaporeans/PRs. If you do not have enough Singaporean/PR shareholders, you may find it harder to secure a business loan.
Credit Score
Business loan providers can also choose to deny your loan if you have a poor credit score. A low credit score causes banks to doubt your ability to repay your loan. And yes! Your personal credit score does impact the results even if it’s for a business loan.