Being an owner of a small business can also be difficult. Apart from the problems that the small business owners have to face in operating business, one of the main […]
Being an owner of a small business can also be difficult. Apart from the problems that the small business owners have to face in operating business, one of the main problems is the business capital. Nowadays, it is not easy to raise a capital, particularly in an environment in which small business owners are accorded a status similar to borrowers with bad credit.
Self-employment is also considered a bad credit case because of the unstable income generation through the small business. It is sad how a small business owner will pay fixed instalments on a loan if he has not made much profits in a particular month. Banks and financial institutions are thus not receptive to the demands of the small business owners.
Nowadays, some loans are designed particularly suited to the small business owners. Some lenders, who did not want to lose on the opportunity of money lender singapore to the big group of small business owners, offer this kind of loan. It is known as small business loan or small loans.
Small loans are made specifically small entrepreneurs who invest it in the expansion of their facility, buying furniture, purchasing new tools and equipment’s, and also to buy raw materials and pay wages to workers.
However, the rate of interest charged on small business loans is higher than the money lender singapore. Similarly, lenders will only lend a limited sum of small business loans. These are sufficient proof of the manner in which lenders prepare for any risk that may emerge in the future. So what differences can a borrower notice in small business loan, which goes in his favour? Borrowers can get an arrangement designed by which they can repay loan instalments easily.
Small business loan with a flexible repayment schedule sufficiently solves the problem of the self-employed people. Through a flexible repayment schedule, borrowers do not need to make repayments of a pre-specified amount and a pre-specified period. Depending on the income that they are able to salvage in that period, they can make repayments accordingly. Therefore, in certain months there can be underpayments, overpayments, and no payments at all (termed as payment holiday).
Not all lenders may be ready to accommodate people with small business so if you consider the clause of flexible repayments, then you should go to the next lender in line. You can also ask help from brokers that are associated with several loan providers. When a person applies for a small business loan to these brokers, they forward it to all the lenders who they think can appropriately advance loans to the entrepreneurs. The broker usually takes care of searching for a loan company. The borrower just has to choose from the large number of deals that the lenders forward. Brokers can also arrange small business loans from lenders who accept flexible repayment. Similarly, other specific requirements of borrowers can be incorporated into any small business loan searched. Then the brokers charge certain fees for their services.
Small loans can be either short term or long term. A short-term small business loan is repayable in a period ranging from certain months to a year. Long-term small business loans, on the other hand, advance money for as long as 20 years. Depending upon ones requirement, the small business owners can decide term of repayment and other terms and conditions of the small business loan.
In any business venture, there will come a time when you will need additional funding to help develop the growing needs of your company. The need normally comes a time […]
In any business venture, there will come a time when you will need additional funding to help develop the growing needs of your company. The need normally comes a time when the business is starting to attract more clienteles but the cash available for the business will not suffice the growing demands of the customer.
The solution therefore is to apply for business loans that would help ease the business expense on inventory goods and operating cost. Any type of loans in the financial market today varies but all of them are advantageous to all types of businesses.
However there are some money lender singapore packages that are specifically intended for small and medium size businesses.
Aside from the very popular line-of-credit loan offered by many lending companies, there are other kinds of loan that a business owner can avail of. There is the installment loan where the repayment scheme is to pay back the loan including the interest in equal monthly payments. The number of installment payment will depend on the agreement between the money lender singapore and borrower. Installment loans allow the borrower to get in full the amount he applied for and its interest calculated the acceptance date of the check to the final date of payment.
In most cases, this type of loan normally falls under the short term and small personal loan category. The loan is short term because repayment is usually finished within a year and the amount involved not unusually big. The loan can also be pre-terminated by the borrower by paying the remaining principal amount before the final due date and there is usually no penalty in doing this. In fact, if the borrower prefers to terminate the loan before its due date appropriate adjustment is done on the remaining interest to be paid.
A Balloon loan is another way to go. Balloon loans offered by a loan company are usually written under another name but you will be able to recognize once the full amount is received after the contract is signed and only the interest is paid off during the life of the loan.
The principal amount is paid only on the final due date of the loan. In rare instances, a loan company will offer loans whose interest and principal amount is to be paid simultaneously on the loan’s maturity date. Another type of loan usually availed by large companies and multinationals is the Letter of Credit or more commonly known as “LC”.
This is normally used for transacting business with companies outside of the country. This is a type of a bank loan that will allow entrepreneurs to guarantee payment to suppliers and other business entities outside the home country of the borrower.
Other types of business loans that would be of great help to business industry are short and long term loans, second mortgages where real estate is used to secure a loan, inventory and equipment loans, Account receivable loans where the loan is secured by the businesses outstanding accounts, personal or character loans, guaranteed loans where the loan is secured by a third party and commercial loans usually offered by commercial banks and other commercial lending companies.
When you are looking for ways to increase the start-up capital of the online business you are putting up, there are many financial institutions that offer type of loans that […]
When you are looking for ways to increase the start-up capital of the online business you are putting up, there are many financial institutions that offer type of loans that will fit your business needs. These entities includes commercial, trust and saving banks; straight commercial lenders and even credit card companies for individuals who are holding high valued credit cards with a very high credit limitation.
When contemplating in filing for a business loan, you must first know and understand the various types of business loans available on the market today. This will enable you to review and select the most appropriate loan package that would suit your need. Line-of-Credit is one type of business loan available from any loan company that exists in the market today.
Line-of-Credit loans are business loans more suited for small businesses. It is a kind of a bank loan that is more permanent in nature because it basically protects the business from cash flow emergencies. Line-of-credit loans are usually intended for the purchase of inventory goods and payment for operational cost of the business. They are never intended for the purchase of any fixed assets such as business equipment or properties for the business.
The main function of line-of-credit loan is to extend or automatically increase the checking account of the online business to a specific amount but enough to cover any payment shortage transaction made by the business. The extended cash is actually a form of cash advance from the lending institution and this of course will incur interest from the time the cash was advanced by the bank until such time it’s paid back in full.
In most banks and lending companies, line-of-credit incurs the least interest rate and the loan is sometime considered to be a form of flexible loans because of the following reasons. First, the borrowers are given the right to cancel the loan in the event their businesses are compromised; second, interest remittances can be done on a monthly basis or depending on what was agreed on between the bank and the borrower. Third and most important of all, the principal amount can be paid off at the borrower’s convenience.
Because of the loan’s flexibility, most lending institutions only provides a one year term on its applicability. However there can be an agreement between the borrower and the lender to include a condition on the contract allowing an automatic renewal of the loan but with an annual fee to pay by the borrower.
Like any other forms of financial loan packages, line-of-credit is neither healthy nor unhealthy for businesses and the advantage or disadvantage of this loan to any commercial trade depends entirely on how it is used.
Just like in any situation, anything excessive can be bad and excessive borrowing against line-of-credit can be bad for online business. As in the case with any other type of business loan, borrowers should seriously study the terms and conditions of loans including fees, interest rates and repayment schedules. A serious and thorough study of loan packages you intend to avail of will protect you from any legal problems that may occur in the future.