Hey boss! First, a confession: I can’t cook to save my life. The recent Circuit Breaker in Singapore has seen the emergence of some fantastic home bakers, but I’m not one of them. I’d much prefer a calculator than a ladle.
Everybody is different, you see. There are those who will painstakingly make their own cookies, while there will be others (me) who will just head to Famous Amos.
The keyword – painstakingly.
It’s the same with company bosses who apply for business loans on their own. Of course, they can try and do it, but it will be painstaking. And often they regret it totally.
Smart bosses, on the other hand, will go for efficient, effective, and pain-free solutions.
Times are bad, business is poor, and cash is hard to come by. Raising funds via business loans in Singapore has never been more difficult today. Look at the obstacles bosses have to face even before they put a pen to an application form:
- The world is still battling against a pandemic and the global economy is receiving the worst battering in a century;
- Many SMEs are in danger of going under and are desperate for cash injections;
- Banks are handling an unprecedented amount of business loan applications, meaning there are too many fishes in the pond fighting over a few bread crumbs;
- And lenders are now tightening their criteria as they become more discerning towards applicants, and your chances of getting it approved just went down exponentially.
The challenge of securing an SME loan is real, and especially so for first-time business owners. That doesn’t mean it is any easier for those who have had prior experience of successful applications.
Worse, many bosses do not even know why their applications are being rejected. Simply because they are never told the reasons why. Well, you see, bankers are bound by the Banking Secrecy Act that restricts them from revealing the reasons to business owners.
So you’re left to figure it out on your own. Trial and error. While desperate for money. Sounds terrible? That’s why many bosses regret their decision to self-apply.
PERILS OF SELF-APPLICATION
I feel your pain, boss. I understand you want to save on the broker fees. If you really, really, want to go ahead and apply for the loan yourself, just take note of the tips below:
- Know what you want
There is no one-size-fits-all loan in the market. There is a myriad of loan products from different financial institutions, suitable for different businesses of different sizes at different stages of their development.
Before you apply for a loan on your own, you must do enough research on the different banks, their offerings, how the loan works, and ascertain what best suits your current business needs.
Just don’t tell me you have no time to do the homework.
- Know the process
It is key to know what you’re getting into before starting your loan application. It is wise to understand the process and know which are the basic requirements and documents integral to a successful application.
Submitting wrong or incomplete documentation will result in banks taking much longer to assess your application, and may even lead to loan rejection. And with banks typically keeping mum on why your application just went into the shredder, you won’t even know what mistake you’ve made.
- Know yourself
Lenders take reference from several indicators before approving your loan application. The indicators include things like your credit score, credit history, debt repayment behavior, monthly transactions, bank balances, and financial statements.
Make sure you’ve got all these tightened up before filing your application. The rosier they are, the higher chance you’ve got.
- Know the consequences
Do you know what happens if your loan application gets rejected? Your business will be blacklisted for up to 6 months.
Yup. Banned from taking a loan for up to 6 months. Not exactly what you want to hear when you’re desperate for that cash injection to keep your business going during such difficult times.
And, let me remind you again: Banks can blacklist businesses from taking future loans without explanation. Yeah, it sucks. And you can do nothing about it.
- Know what the banks want
This is common sense. If the bank requires the submission of 5 key documents and you only furnish 4, then you’re asking for trouble. So, seek clarity from the lenders on what they require and deliver what they want.
Failure to do so will affect your chances of success. Incomplete or wrongful submissions will see precious time wasted during processing, and banks may even ignore your application. If the lenders get frustrated by your incompetence, they may even reject your application and blacklist you.
IS IT WORTH IT?
Now, boss, must you really do it the hard way? There are good reasons why companies hire accountants to help keep their books in order. The same goes for business loan applications. Some things are just better left to the experts.
Frankly, it’s not worth the risk.
What’s the logic behind DIY and hope for the best, against leaving it in the hands of a loan broker with the assurance that there will be a much higher chance of success?
What’s the value of investing so much time and effort on a loan application that will make or break your business, without giving yourself the best possible chance to succeed?
Why not leave it to the experts – like Beacon Financial Services – and get the best possible loan deal without having to navigate past a maze of forms and processes?
At Beacon, we help your business improve your cashflow and raise capital for you with speed and certainty. At our fingertips are the best rates and deals in the loan market and on our speed dial the best contacts in the banking industry.
More importantly, in our heart is a commitment to guide you through every step of the loan application process to make sure it’s smooth till loan inception and disbursement.
Boss, the economy is in turmoil and there are enough challenges on your hands, with lots of painful business decisions to make. Let us help you lessen that pain.
You won’t regret it.