You're facing one of the biggest challenges for SMEs: financing. Obtaining sufficient funds, affordable interest rates, and fast access to funds are all important. But speed is especially crucial when you need to meet urgent demands and capitalize on opportunities. Without enough funding, your business decisions can come to a halt, and growth opportunities could be missed. To help you get financing quickly, here are three options to consider: bank loans with instant approval status, alternative financiers, and business credit cards.
As an SME looking for financing quickly, applying for a loan with a bank can be a great option for you. However, keep in mind that not all banks are created equal and processing times can vary greatly from instant to 3 months. Therefore it’s essential that you pick out the right banks. The banks that offers instant approval statuses include OCBC, which is especially convenient if you are already an existing customer. With support from a simple application through Singpass, OCBC Business Term Loan offers up to $700,000, making it a great choice for SMEs with a good credit history (as shown in your bank statements) and a solid business plan.
Even new businesses, those less than two years old, can apply for OCBC's First Business Loan with minimal documentation required. This loan doesn't require any collateral and can be applied for completely online. You also have the flexibility to choose a loan tenure of one to four years, allowing you to match your business cash flows.
As a second option, you can also consider alternative financiers or peer-to-peer (P2P) lenders for quick financing. Keep in mind that P2P lending can come with a higher interest rate and a shorter loan tenure of no more than 18 months. You may be asked to provide multiple documents, such as financial statements and business plans, as these lenders do not have direct access to Credit Bureau Singapore (CBS). However, if you have been rejected by traditional banks or need funding fast, P2P lending can be a good choice. These lenders offer a variety of loan products and can be more flexible than traditional banks.
Thirdly, applying for a business credit card can be an effective way for SMEs to get financing quickly. You'll typically be able to get approved as fast as the same day, and with up to 55 days of credit, you'll be able to cope with cash flow. Additionally, business credit cards offer rewards and benefits that can help you save money and improve your cash flow.
Some providers even offer personal liability as an option, so you won't have to rely on your company's financials for approval. This makes it a suitable option for new start-ups. However, keep in mind that a credit card is restricted to "cardable" expenses, and using a payment channel like CardUp to pay for things like rent or salaries will incur a fee of approximately 2%. Additionally, interest rates on business credit cards can be higher than traditional bank loans, so if you end up rolling over your outstanding balance, you may end up paying more. As a result, a business credit card may only be a partial funding solution for your business.
In conclusion, SMEs have several options for getting financing quickly. Applying for a loan with a bank, alternative financiers, or a business credit card can all be quick ways to get the funding. However, it's important to carefully consider the terms and conditions, fees, and interest rates before making a decision. Below is a quick summary of what we have discussed:
As you can see, banks are the best option especially if you can leverage on your banking relationship as they are aware of your need and stage of growth from your transactions.
Jennifer loves helping SMEs in their business growth journey. She is also an epicurean and has perpetual wanderlust. During the weekend, she weaves poems out of thin air and buries herself in books.