6 Types of Business Loans in Singapore You Must Know as a Foreigner
In most countries, securing a loan is easy if you are a resident. But what if you are a foreigner? It can be quite challenging. Do you need some loans to accomplish some goals, but you don’t know how to go about it? If you’re a foreigner in Singapore, do not panic. You can get that loan you want effortlessly and reliably. Singaporean foreigners have access to personal loans generally obtained from licensed money lenders. These loans are generally for use in paying rent, doing repairs, or covering emergency bills. What if you want to secure a business loan as a foreigner? The following types of loans can be helpful for your business;
Unsecured business term loans
Probably, you would want a working capital for your business. This is the most common option. It is given by banks approved by the law and can be up to a maximum of $300000 for any bank. These loans will help boost your business and cover the costs of running it. You can obtain a loan by following the right procedures stipulated by the bank laws and using legit documents. The advantage of this type of loan, as opposed to the secured ones, is that you don’t need security. However, its interest rates are very high since it is riskier to the lender. The loan approval might also take longer or not go through. For a foreigner, you might consider trying this loan since you might not have an asset to use as security.
This is what moves trade globally. It involves the guarantee of payment to an exporter from an importer. The importer can also be assured that the goods will be safely received upon payment of the money. Therefore, it works well for both groups.
It is suitable in case you are dealing with the purchase of materials from suppliers. Even when dealing with suppliers overseas, you can send them credit letters. This is also used in financing inventories. The credit letter issued to an exporter is an instrument of trade finance. It is used to offer an assurance of payment. It is globally used as a way of payment and accepted in the world trade. You can procure supplies overseas using import financing. You can obtain this type of business loan from any of the local banks around you. Therefore, if you are planning on construction, manufacturing, or engineering business, trade financing will prove suitable for you in Singapore.
This is structured as a lease or hire purchase. It is used to finance the purchase of fixed assets like equipment and machinery. All businesses require the use of equipment, be it office equipment or those used in production. Some even need machinery. The banks in Singapore are, therefore, a vital source of this kind of finance. You might also check with hire purchase providers of these items. In case you are not staying in Singapore for long, you should rent them from a leasing company.
The government in 2016 came up with a finance scheme to help local SMEs obtain financial support. Therefore, these loans are government-aided. They are also used as working capital. You can obtain up to $100000. The government in Singapore has set up almost ten financial organizations to help people in this platform. The interest rates on these loans vary from one financier to another. To know more about the rates and your eligibility to apply for the loan, contact participating banks.
Your business will need to be set up on the premise. Offices, production plants, and even showrooms are among some of the needs for premises. This will depend on the type and nature of your business. Mortgage loans provided by banks and other financiers can help finance the acquisition of property. You can either pledge a property you already own to banks to get financial assistance. Additionally, you can get the loan to buy your new industrial or commercial premises. As a foreigner, this might pose a challenge but proper guidance on how to go about the loan acquisition can help.
Working capital loan
For SMEs in Singapore, a scheme was set up to assist in their working capital. As of now, it has been improved to offer up to a maximum of $600000 financing. This can help stimulate the growth of your business. In line with that, you can access this loan from any of the 14 financial organizations available across Singapore. Their interest rates vary, and it’s, therefore, advisable you enquire more from them I should you need this loan. Again, as a foreigner, you may be eligible for the credit or not; it is upon you to check with the financial institutions.
Having considered the six types of business loans in Singapore that you must be aware of as a foreigner, it is good to know what makes you eligible for them. Usually, lenders must be confident and content with your eligibility before giving you a business loan. They, therefore, will check on your credit status to review your business’ credit history, the period you have operated the industry and business turnover. Your business must have made some revenue over the past months hence assure them that you will be capable of paying the loan.
You also need to consider some essential points before you go for a loan. These may include; how much the loan will cost you, checking if the terms of repaying the loan meet your needs, your eligibility criteria, and a comparison of different business loans’ fees and rates. Check what you can qualify for at https://www.a1credit.sg
The Bottom Line
Whether you’re a Singaporean local or foreigner, you have all the business loan options that you may need. Only ensure that you calculate the expense before proceeding to take a long time since some of them like the unsecured loan can mess you due to their high-interest rates. The government of Singapore has indeed made it possible for you to carry out your business in the country without the stress of finance. All the necessary types of business loans you require have been available. Indeed, there is no cause for panic.