The most significant time to apply for a company loan is when you don’t need one immediately, as you’ve likely heard before.

Most of us, though, are not as forward-looking as Warren Buffett. If you own a small business, you may find yourself in the unpleasant position of requiring a loan urgently but not being able to obtain one despite your best efforts.

Hire a business loan broker to assist you.

The role of a business loan broker 

Using the services of a business loan broker is a good alternative if you are pushed for time, confused about the loan application procedure, or don’t know where to begin or who to approach.

Most, if not all, business loan brokers began their careers as relationship managers before deciding to go it alone. Since they have a network of contacts, they will know who to contact for different loans.

Depending on your current demands and constraints, an experienced broker will assess your case. The broker will use this information to discover lenders who may approve your loan.

Until they find a lender willing to lend to you, the business loan broker will make an effort for you, approaching Lender A, B, C, and so on.

Additionally, the broker is paid when the bank loan you requested from him is approved by a financier, whether it’s a bank or private lender.

This cost varies, but it is often a percentage of the loan amount in most instances. Before using a broker, confirm that you are comfortable with the charge.

When should you work with a business loan broker:

1. Directors of your business have less-than-ideal personal credit scores.

Before approving a loan, banks review the personal credit histories of company directors since they are reasonable indications of credit health.

Keep in mind that company directors with a history of late or defaulted payments, involuntary settlements, or even bankruptcy will have a significantly lower probability of being approved for financing.

Credit Bureau Singapore (CBS) or Experian can provide personal credit reports to individuals.

2. Your company is super new.

Unfortunately (and unfortunately), the world doesn’t function that way.

Banks and financiers are unlikely to lend to a brand-new company. In the absence of tangible proof of your business’s profitability, you run a considerable risk of defaulting on the loan.

Your business must be at least six months old (and preferably one year old) before you apply for a business loan.

But if your business loan broker has excellent ties with banks and financiers, they may be able to assist you in making a stronger case.

3. You keep getting rejected by banks.

Banks would never divulge the specifics of the criterion loan applicants must meet before their loans are authorized for reasons of security and competitiveness.

They also won’t tell you what specifically was wrong with your loan application.

During this time, your business loan broker can provide you with advice on how to increase your loan’s approval chances.

Who knows what could happen with a little experienced help? Things may work out for you.

4. You don’t know any relationship managers.

You may feel alone, cold and depressed when you apply for a loan – especially after being rejected time and time again.

Relationship managers from different banks are usually helpful.

Befriend them if you can. They may be more ready to press for your loan approval if you are friends with them.

A company loan broker is your next best option in the absence of a personal network of relationship managers.

5. You are unable to organize your paperwork.

To submit a loan application, you will need to compile a few documents.

Your company’s business profile from the Accounting and Corporate Regulatory Authority; the personal credit scores of all company directors from CBS; your company’s financial statements for the past two years; your bank statements for the past six months; and your company directors’ tax bills for the past two years (also known as the Notice of Assessment).

It will help the bank determine the credit standing of your company’s directors, the amount of debt owed by each director and your company, as well as how well your business is doing financially.

When it comes to gathering all of this paperwork, your business loan broker can assist you.

6.You have no idea which sort of loan is ideal for your company.

There are many different types of loans available. If you don’t want to take out typical term loans, there are other options.

For example, a line of credit or overdraft, invoice factoring, or finance for purchases is all options to explore.

Know what you need the money for. Is it for your payroll, for example? Your firm will grow faster, or new orders will come in without having to wait 60 days for payment.

A good option in this instance would be invoice finance or invoice factoring.

If you’re still unsure, it’s essential to sit down with your broker and determine why you need the loan before selecting the one that’s right for you.

7. You have no idea what you’re doing wrong.

It is natural to make mistakes when applying for a loan, especially if you have never done it before.

However, it isn’t easy to know what to fix because most financial institutions (FIs) don’t tell you why you were turned down. When different FIs constantly refuse you, it’s discouraging.

Working with a business loan broker will save you the time and effort to renew with different financial institutions.

Not only can the broker assist you in determining what went wrong, but they will also know who to contact next, based on the quantity you’re searching for and your specific requirements or limits.

8. A nominal fee is acceptable to you in exchange for your loan being accepted.

A problem isn’t a problem if it can be solved with money, as the Chinese proverb goes.

Let your trusted business loan broker handle it instead of shooting in the dark and spending time reapplying to multiple FIs.

All that survives is for you to pay them the agreed-upon fee once your loan is approved.

That said, read the contract thoroughly (including the fine print), ask lots of questions, and double-check that you aren’t signing to anything you didn’t understand.

Published On: September 6th, 2021 / Categories: Uncategorized /