Pros and Cons of Personal Loan in Singapore
If you need cash for your business, a personal loan Singapore is just one of the many viable options you have probably thought of. But, as a business owner, is this the right route for you to go when you need cash? Do you have other solutions or alternatives you will find to be a better option, rather than taking out a personal loan Singapore? Due to the fact that there are so many lenders, and so many options for you as a business owner, only those who truly think it through, are going to make the right decision in the end.
Whether you are a new start up or have been in business for a few years, there is going to come a point in time when you need cash, or are tight on funds. So, when the time comes, you truly have to know what all of the options are, which ones are going to make the most sense, and how you should go about deciding on where to borrow. So, let’s take a look at some of the options you are going to have, and what way you should go, when you need cash for your business expenses, or to expand, as a business owner.
Learn more: Can I get a personal loan for business?
Personal loan advantages
Convenience is a big one; if you don’t have cash, or a certain income level, most banks won’t work with you. On the flip side, a lender is more lenient and more willing to extend you the loan as a business owner, when you are strapped for cash. So, this is one of the big reasons you are going to find that many of the smaller businesses, do rely on personal loans when they need instant cash, and might not be able to go with a traditional bank lender for that cash. Especially if you are a new or smaller business, it is very hard to get a bank loan, so you can go with a personal loan lender instead.
Readily available; in fact, in a matter of 24 hours you should know the answer. Instead of waiting a few weeks, only to learn a bank is going to deny you, or come back with a counter offer, which is simply not enough money when you need it most. So, if you need an instant response, even if you do not get as much as you need, with a personal loan, you are going to know right away how much you are going to get, what type of interest rates you are going to pay, and what the repayment terms are going to be on that loan. You are not going to get this with a bank, so this can greatly set you back as a business owner. If you seek immediate responses, then you are going to like the option to go with a personal loan lender, rather than trying to go to a local bank in order to take out a loan.
Pitfalls of personal loans
There is the good, but you should also be aware of the potential bad or risks, when it comes to taking out a personal loan for your business as well. Interest rates; in fact, you can expect to pay about 12 to 16% with most of the lenders in Singapore. So, this is going to be significantly higher than what you would pay to a bank; if you are not careful, or do not budget accordingly to ensure you can repay this loan, it is possibly going to hurt more than it is going to help you as a business. Make sure you plan in advance, and that you know what you are going to be getting into, if this is the route you choose to go as a business owner.
As a borrower, you are personally responsible. So, unlike the traditional bank, where the business is held liable, this is not the case with a personal loan. You even in the event your business goes under, is going to have to come up with some way or form to repay the loan. So, you are going to be held personally liable, not your business, if for some reason you are not going to be able to make the payments on it. This means you are going to have to repay it, no matter what, and whether or not your business fails. When you go through a traditional bank loan, this is not the case. If the business goes under, the loan doesn’t stay with you.
With personal and SME loans there are good and bad; but, there are also some options you have, aside from these as a business owner, in the event you need cash. Crowd funding is a great option; and, with so many platforms you can go through, you are going to find that there is more than one place you can turn to for money. And, with this option, you are not taking out a loan, but rather, you are getting a group of investors who believe in your business or idea, who are going to front you the money for that business venture.
You can find various forms of capital, and there are quite a few ways in which you can go about finding it, with the power of the internet today. It will take some creativity and you do have to search around some, but you will find there is more than one way to find the cash you require as a business owner today.
No matter what amount or what you plan on using the cash for, a personal loan is just one of the many options you are going to have, when you do need cash as a business owner. So, when the time comes for you to apply for a loan or go in to a bank, these are a few things you should consider, in order to ensure you find the best option, and the one which is safest for you as a borrower and a business owner as well.
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