When running a business, borrowing money may be frowned upon by other business owners as it is perceived as a sign of a struggling business. It may also be perceived as a sign of financial mismanagement in the business, as others may assume that your business is running out of liquid assets or cash.
However, taking out a business loan can be very helpful for your business, especially in certain situations. In this article, we will be talking about some ways your business can benefit from taking out a small business loan.
To finance expansion and growth
An opportunity to expand or grow your business may occur any time. However, your business may not have enough assets in hand to take advantage of the said opportunity, due to the enormous cost associated with expansion and growth.
In this situation, a small business loan can be useful, as it will be able to increase the amount of liquid assets that your company has in hand, allowing you to take advantage of the opportunity to expand your business.
A loan can also help you accelerate the expansion of your business, as you may have to wait for more funds to help to finance the growth. However, with a loan, your business will be able to expand quicker, as you will have more funds on hand to do so. Being able to do so will allow your business to take full advantage of the opportunity to expand at a much quicker pace.
In Singapore, there are many financial institutions that are more than willing to help your business expand and grow. One such financial institution is Soon Seng, which is a licensed money lender that offers some of the best SME business loans in Singapore, as they are collateral-free and have simplified requirements.
To manage cashflow
When running a business, there will off season periods and cyclical downturns that could affect it’s cashflow. In times like these, it is always important to take have enough liquid assets to fund daily operations and pay staff salaries. In these situations, a loan can help to increase the amount of liquid assets that your business has.
Credit can be also used to pay off or consolidate debt so as to reduce negative cashflow in your business and lessen financial burdens. A small business loan can also be used as a long – term investment. For example, a loan can be used to buy more inventory or hire more staff, which could help to bring in more revenue in the future.
To build up credit worthiness
This may sound illogical, but taking up a loan and paying it back in a timely manner will increase the credit worthiness of your business among financial institutions such as banks and licensed moneylenders. Repaying loans on a timely manner regularly will allow your business to build a relationship with financial institutions as they will see your business as a trustworthy prospect and client who is able to repay loans in timely manner
Thus, it will be easier to take out a loan in the future from the financial institutions that your business have borrowed from, as your business is considered to be a trustworthy entity that is able to manage it’s finances well enough to repay the loaned credit in a timely fashion.
Loans can be beneficial to your business
Many businesses may have their doubts about taking out a small business loan, as they think that those financial institution do not genuinely want to help them. Instead, they may think that those financial institutions are there to make a profit off their businesses by giving them a loan.
However, there are many financial institutions such as banks and money lenders that are genuine in helping businesses, especially when the latter needs funds to finance expansion and growth. One such institution is Soon Seng, which is a licensed money lender that wants to genuinely wants to help businesses out, especially when the latter is trying to expand and grow.
Soon Seng does so by offering collateral free SME business loans that ranges from $10,000 to $300,000. It has also simplified the requirements needed for business loans. It also works to ensure that it’s loan process is swift and efficient. Soon Seng also offers custom repayment plans to help businesses make use of the loan without feeling pressured to repay the amount.
Contact us via email at email@example.com or via phone at 6292 5693 to discuss how we can help your business!