4 important factors to consider before taking out a business loan

a borrower shakes hands with a lender when borrowing a business loan

When running a business, there will be times when cash flow in your business is a problem, especially when the business is an SME, a small or medium enterprise. Cashflow problems which are not resolved quickly may lead to other negative consequences for your business. For example the growth of your business may be restricted and opportunities may be missed as you may not have the capital to take on the said opportunity.

One way to resolve cash flow issues in a SME is to take up a small business loan. A small business loan is a type of money loan and business financing which is specifically created for small businesses. However, before taking on a small business loan, a SME owner should consider certain factors regarding the loan to ensure that he is making the right choice, as taking on a business loan will have an impact on the financial state of the business.

With that being said, here are some factors a business owner should consider before taking on a business loan.

Factor 1: Your company eligibility for a business loan

Before even thinking about other factors when it comes to taking out a small business loan or an SME business loan, you should consider your company’s eligibility for it. For example, some of the loans offered by banks may require your business to be incorporated in Singapore for a number of years and have at least 30% local shareholding.

With so many different requirements, it may be difficult for business owners to take up loans. But, there are other loan options available with much lesser requirements, such as the business loan offered by Soon Seng.

Soon Seng has kept the needs of business owners in mind and has simplified the requirements to make it easier for businesses, especially SMEs, to get a loan. When applying for a small business loan with Soon Seng, you will just need to fill a simple loan application form, and the loan amount and repayment plan will be considered for approval.

Factor 2: How much credit is needed?

When taking out a small business loan, you will need to know how much credit your company need. This is because there is a range of banks and money lenders which offers many different business loans. The maximum loan amount offered by those banks and money lenders varies, which means you will need to decide carefully about the amount of credit your business needs before you take a loan out.

Factor 3: Purpose of loan

Before taking a small business loan, you should decide what will it be used for, so that you will be able to make a better choice when selecting the loan that is needed, allowing you to choose a loan which will best suit the needs of your business.

You should also conduct an assessment of company’s finances, so as to really determine whether your company needs the loan. This is because after taking on the loan, your business will have more financial liabilities, which means that your business will need to be to be able to pay off the debt.

Factor 4: The interest rates and repayment plans of the loans

Two of the most important aspects of loans are the interest rates and repayment offered by the lender. There are many different interest rates and repayment plans offered by banks and money lenders, so be sure to have a thorough understanding of the above-mentioned details before taking up the loan.

Decide carefully when taking on a business loan

As a business owner, you should decide carefully when applying for a business loan, as it will affect many aspects of your business. When applying for a small business loan or an SME business loan, you may be worried about certain aspects of the loan, such as the eligibility of your business for the loan and the processing time for the loan.

With Soon Seng, you can be assured that your application for a small business loan will be processed in a swift manner without any interruptions and that the loan offered will have low interest rates. You can also be assured that your business will be eligible for a business loan, as you will just need to fill up a simple loan application form in the loan office, and the loan amount and repayment plan will be considered for approval.

Contact us via email at or via phone at 6292 5693 to discuss how we can help you with your financing your business!

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