What you need to know before taking up a Business Loan

When taking up a business loan from a bank or institution, you would have to provide them with 3 main documents for the bank of assessments.

-       Bank statements (monthly credit turnover, cash balance)

-       Credit Bureau

-       Directors’ Liabilities (properties, cars, etc.)

-       Company name and ROC number (Registration of Company)

The debt servicing ratio is as follows;

Monthly commitment of co. + Monthly commitment of director

Monthly income of co. + Monthly income of director

If the result is more than 75%, you would not be eligible for a business loan or trade financing. There are other factors to consider as well, especially for non Singapore citizens. A Permanent Resident of only more than 5 years is eligible for a business loan.

A business loan takes about a month of processing to be approved by the bank or financial institution. The maximum loan tenure is typically 48 months/2 years and business loan amount ranges from $100k to $1million.