A business loan may allow small company owners to produce new goods and services and expand their enterprises. When it comes to documents for business loans, it supports cash flow and solvency. Last year, as the COVID-19 outbreak progressed, several Singaporean firms collapsed within weeks due to the strict quarantine restrictions that made it impossible for consumers and sales to persist. The economy likewise deteriorated, with Singapore’s GDP decreasing by 5.8% by 2020. To assist firms in recover, the government started granting small-to-medium-sized company loans, and banks have been backing firms throughout this period. If you’re seeking a SME loan in Singapore, here are the few paperwork you need to do.
What Documents Are Required for a Business Loan in Singapore?
If you’re wondering about “how to apply for a business loan,” your application for a business loan will have a stronger chance of being approved if you provide the necessary documentation. In particular, if you’re based in Singapore, the following is a list of the six most essential papers you’ll require to apply for a business loan.
1. Details on the ACRA’s business profile
Lenders can determine the nature of your company with the assistance of the Accounting and Corporate Regulatory Authority (ACRA) document. This document includes information on paid-up capital, directors, shareholders, and any other information that is required to facilitate the loan application process. You have the option to obtain your company’s information from the ACRA website.
2. Declaration of the assessment of each director
A Notice of Assessment (NOA) from the business directors that goes back over the course of the previous two years is the second document that you will require. This document is very important to lenders since it assists them in determining the maximum amount that a borrower is permitted to borrow in relation to the duration of the loan.
3. Director report from Credit Bureau Singapore
The report from the Credit Bureau Singapore (CBS) is the third piece of documentation you will need. This document notifies potential lenders about any current debts that the directors of your business may have, as well as their repayment histories and the sums of any unsecured loans.
4. Company’s financial statements for the last two years
The next document requested by lenders is your company’s financial statements dating back two years, including the company’s profit and loss statements and balance sheets. First-year financial statements are sufficient for businesses that are less than two years old.
5. Recent bank statements
You’ll need a bank statement that goes back six months from the date of application in order to submit your application for a business loan in Singapore. It is helpful for lenders to identify the day-to-day activity of bank accounts, including income, costs, and the amount that is still in the account at the end of the month.
6. Aging list of accounts receivable
While maintaining an aging list of accounts receivable is often optional, doing so may assist a company in increasing the variety of loan options that are accessible to the company. To put it another way, this document includes details on your customers, as well as an estimate of how much money you should get for the goods or services that you’ve previously delivered to them. This might be useful for deciding whether or not one is eligible for certain loans, such as invoice financing.
Business Loan Documentation on MSME Blog
It’s possible that applying for loans for your business might be a challenge for you, particularly if you’re the only entrepreneur of your own company. Be sure you submit the correct paperwork in accordance with the above guidelines to avoid any unnecessary delays. In the case that your business has been running for less than two years, you are still able to provide the financiers with your financial accounts and documentation for the previous year in order to demonstrate the progress that your firm has made so far. Get started on your business loan application today by gathering the important documents you’ll need!
MSMEBlog provides expert solutions and guidance for financing MSMEs. For more information on MSME finance, visit MSME Blog website.