What you need when applying for a business loan
Applying for a business loan? Here’s everything you need to prepare.
Whether you are thinking about growing your business, buying a new piece of equipment or simply making your day-to-day operating costs, a business loan can help. Here’s everything you need to prepare before applying for a business loan.
- Think about the kind of loan you need
There are a variety of small business loans you can opt for, depending on what you require funding for. For example, a DBS Business Loan or DBS SME Working Capital Loan can provide funds to help you make payroll, pay for day-to-day operating costs, or simply ride out less profitable periods. If you need a loan to fund an equipment purchase, a DBS equipment financing loan could help. It’s important to get up to speed with the types of available business loans before you apply.
- Think about how much money you need to borrow
A business loan is often used to pay for new equipment, or the expenses associated with launching a new product or service. Beyond that, however, it’s important to think about whether your business will need additional financing in the future in order to grow. While some businesses borrow the maximum amount they can, this may be insufficient for the future. It’s essential to forecast your financial needs for the next few years before deciding on a loan amount.
- Ensure your accounts are in order
To help you get a better picture of your exact financial needs, it’s essential to keep on top of your books. If you’ve been neglecting your company’s accounts, you should get them in order before applying for a loan. If you haven’t already, consider automating your company accounts to ensure they are always accurate and up-to-date. Online accounting platforms like Xero and ABSS Financio can easily be linked to your DBS business bank account to support your accounting needs.
- Think about collateral
The loan you apply for could either be unsecured or secured. If you apply for a secured loan, the bank will require that you put up collateral when you apply for your loan – meaning your assets are on the line in event of a loan default. Before you begin the loan application process, it’s essential to think about which assets you will need to pledge, and if you are willing to take the risk.
- Prepare supporting documents
Finally, you’ll need to have all the necessary supporting documents ready ahead of your loan application. These include the last two years’ income tax assessments for your company’s sole proprietors, partners or directors; NRIC or passport copy of your guarantor; as well as your latest 3 months’ bank statements (if your bank is not DBS). If you are applying for a higher loan amount, it’s important to prepare your last 2 years’ financial statements as well.
Applying for a bank loan is quicker and easier than ever. Click here to apply online for a DBS business loan today.
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