How do I get a term loan for my SME?
If you’re an SME owner looking to fund an expansion or take advantage of a business opportunity – or simply improve your company’s daily operations, a term loan may be the way forward.
1. What exactly is a term loan?
When you take on a term loan with a bank, you will be able to borrow a certain amount of funds at a floating interest rate. The loan must be repaid in regular repayments within a fixed period. A DBS Business Term Loan, for example, allows SMEs to borrow up to $500,000 over a five-year period. What’s more – it is an unsecured loan, which does not require applicants to pledge any assets as collateral.
2. How do I qualify for a term loan?
Banks look at certain criteria when assessing if a company qualifies for a term loan. In general, your SME should be fairly established, having been in operation for a couple years at least. This is to ensure that borrowers are credible and stable. Banks will also consider if your business has a good credit rating and payment history. It is sometimes helpful if you, the business owner, have sound personal credit and if your company has adequate paid-up capital.
3. Is it difficult to secure a term loan?
As banks consider numerous factors when reviewing a loan application, it is essential for SME owners to be up to speed with the relevant financial knowledge or even consider speaking with a financial consultant to address their doubts about applying for a loan.
4. How do I improve my SME’s chances of securing a term loan?
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