SME business loan Singapore is one of the best and of course, most availed business fundings of the present day. Business loans are measured a faster as well as safer method to get funds for businesses as compared to other sources such as taking financial help from relatives or friends, crowd funding, or else bootstrapping.
SME business loan typically come in two variations – secured business loans as well as an unsecured business loan. Secured business finance is when the loan is backed by any of the assets of the borrower. On the other hand, unsecured business finance is taken without any security. An unsecured business loan is approved depending on the repayment capacity of the borrower.
When your industry is new and you are in need of a business loan, a secured business loan becomes a superior alternative. Getting an unsecured business loan at this stage of business seems hard as being a new business owner you may not have a high business turn over to show in sustain of your unsecured business loan. Hence, applying for a secured business loan gives you higher opportunities of approval. Not only the higher chances of approval, but a secured business loan also comes with numerous other additional advantages. Let’s discover more advantages of a secured business loan.
Lower Interest Rate
The interest rate of a secured business loan always comes as a sensible interest rate. The risk factor is always less for the lender; hence the lenders offer business loans at a moderately lower interest rate than an unsecured business loan. A business loan with a high-interest rate can be a obstruction to the growth of the business as the EMIs of the loan are going to be of high amount.
Faster Processing
If your need for money is really urgent then a secured business loan can help you to get the desired money faster. As lending money carries slighter risk at the lender’s end, lenders not much hesitate to loan you money. The eligibility verification is always rigorous when it comes to unsecured business loans. So the time taken by the lender to verify the business loan eligibility is a quite long process. But if you apply for a secured loan, you can get the loan amount earlier as the lender only needs to estimate the market value of the collateral before they sanction the loan.
Better Repayment Terms
The loan tenure of a secured business loan is quite long one. The longer tenure period makes sure a small EMI amount. When your business is at the preliminary period, paying out immense amounts in EMI may appear to be burdensome. Before choosing a business loan check your EMI with business loan EMI calculator. Smaller EMIs keep your business move on without much accountability.
Scope for Negotiation
When you are equipped with precious collateral to put up against your loan, getting a loan becomes easier. Not only one can say easy, but having security gives you the influence to have conciliation with the lender. You can shop around for the lenders who are prepared to give you the utmost amount of loan against your benefit. Not only the lender, one gets a scope to discuss the interest rate too.
Higher Capital Amount
The loan quantity of a secured business loan depends a lot on the worth of the security. Even if your business is a new one or the net value of your business is less, you can still get a business loan of the elevated amount if your loan security is of high value. Loan security improves your creditworthiness.
Can Avail Even If You Have a Low Credit Score
If you are choosing for an unsecured loan, the security is one of the most significant checklists of the lender. As there is no security against the loan, the lender verifies the past credit behavior of the borrower to comprehend the possible hazard in lending.