Can I get a Business Loan in Singapore if I Have Bad Credit?
Updated on: December 7, 2022
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You may have heard that it’s difficult to get a business loan in Singapore if you have bad credit.
While it’s true that your options may be limited, it is still possible to obtain financing for your business.
In this blog post, we’ll explore the ins and outs of getting a business loan with bad credit in Singapore.
Table of Contents
What Is A Bad Credit Score?
First, let’s define what we mean by “bad credit”. A bad credit score typically refers to a credit score that is in the range of 1,000 and a crediting rating of HH.
This means that you’ve had difficulty making payments on time or have defaulted on a loan in the past. If you have bad credit, you may find it difficult to obtain financing from traditional lenders such as banks.
Tips On How To Get A Business Loan With Bad Credit In Singapore
If you’re looking for a business loan but have bad credit, try these options.
Approach An Alternative Lender
Don’t just focus on banks, which have lengthy approval lead times. Cast your net to other types of lenders.
There are many alternative lenders in Singapore, and they’re typically willing to work with borrowers who have less-than-perfect credit.
When applying for a loan from an alternative lender, be sure to emphasise factors such as your current cash flow and ability to repay the loan. Providing documentation such as financial statements and tax returns can also help improve your chances of qualifying for a loan.
Of course, even if you do qualify for a loan from an alternative lender, it’s important to remember that the interest rates and terms will likely be less favourable than those offered by traditional lenders.
As such, you should only take out a loan from an alternative lender if you’re absolutely certain that you can make the payments on time and in full.
Ask A Friend Or Family Member For A Loan
This is often the most difficult option because it puts personal relationships at risk.
However, if you have exhausted all other options, it may be worth considering. Be sure to draw up a contract that outlines the terms of the loan so that there is no misunderstanding down the road.
Look For A Licensed Moneylender
There are many reputable moneylenders in Singapore that are willing to give loans to small businesses with bad credit.
However, be sure to do your research before selecting a moneylender as there are many unscrupulous lenders who charge high interest rates and fees.
Check that the moneylender is on the Ministry of Law’s list of licensed moneylenders. This list is updated regularly.
Bad Credit Is Not The End Of The World
There are several options available for small businesses in Singapore that need loans but have bad credit. The best option will depend on your individual circumstances.
Be sure to do your research and select the option that is best for you and your business. With careful planning and execution, you can secure the funding you need to keep your business afloat and succeed in spite of your bad credit history.
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