If you need urgent finance to expand your small business, an unsecured business loan may be the right option for you. Since it doesn’t require collateral, getting approved for an unsecured loan is faster and less complicated than a secured loan. The amount you can get is relatively smaller, but unsecured loans can surely stimulate growth in small businesses.

Here are the steps to apply for an unsecured business term loan in Singapore.

1. Determine the amount needed

You can do this with a good business plan. Set clear objectives and deliverables so you can determine the right amount of money to loan. Don’t go overboard. Only borrow what you need. Overborrowing can get you stuck with repayment obligations that are too heavy for the business. Also, don’t borrow less than what you need to ensure that you achieve your goals and financial projections.

2. Research lending institutions

Look for the best lender that can satisfy your specific needs. Research about lending institutions, their history, and loan offers. Ask around and gather insights about their terms and application process. An unsecured business term loan in Singapore can be obtained from national and local banks, credit unions, and online lenders.

3. Compare loan options

One of the common mistakes that entrepreneurs make is not reading through different loans and comparing the options. Weighing up all the options available will lead you to the best offer suitable to your business needs and capacity. You must check each lender’s interest rate, repayment terms, other fees, and special features. Some offers you can qualify for, some you can’t, so it’s important to check them out.

4. Submit an application

Once you’ve set your eye on the loan offer you think is best for your business, it’s time to apply. Eligibility and the application process vary with each lending institution, but generally, what you need is an excellent credit and a stable source of income. To qualify for an unsecured business term loan in Singapore, you must be a registered business, have been operating for at least 2 years, earn at least $300,000 annually, and have a credit score of 650. Documentations are needed to prove them.

5. Provide necessary documentation

The documentation that may be asked of you may also vary from lender to lender. Generally, lenders may ask you to provide NRIC or passport, financial and bank statements, corporate tax returns, and credit rating and history. Additional documentation may be required, especially if you have a low credit score. Comply with all the requirements in a timely manner so you can finish the application and hopefully get approved as soon as possible.

6. Receive loan funds

The lender will now go over your application and approve or deny it. If it’s approved, the lender will inform you about how you will receive the lump sum funds. Take note of any information and follow the instructions properly to ensure a problem-free transaction.

Unsecured business term loan in Singapore startups

Unsecured business loans are key to SME financing in Singapore. For its faster and simpler terms, an unsecured business loan can kickstart the growth of small and starting businesses. The funds can go a long way from equipment purchases and inventory to marketing campaigns and real estate.