As a business entity, we are aware that proper planning when getting a business loan is important. Without proper planning, the business loan singapore taken may either be mismanaged where it will end up as a debt that causes more problems rather than a solution to the needs of the business.
Proper planning is critical to getting any loans such as personal loan, small business loan, even salary loan or payday loan. It is never wise to take on a loan without planning how to use and manage the loan amount. Planning starts in making sure that you get the loan you need. And one good way to make sure you get the personal loan singapore is through understanding why licensed moneylenders in Singapore reject applications. Here are some of the major reasons but not limited to them.
- Bad or No Credit History
Lenders often want to have a basis to trust a borrower that they will repay the borrowed amount together with interest payments. The best way for a borrower to prove that they are disciplined debtors who pay are proven by a good credit standing. Credit standing are records that show the debtors character when it comes to debts. They pay on time and maintain good relationships with their creditors.
- Insufficient Collateral
When a financial institution or a bank needs to ensure that the personal loan is secured, a collateral is needed. A collateral is a form of asset that is endorsed by the borrower to the lender. The lender puts a lien over the asset and gives them the right to sell the asset to recover the loss in case of borrower’s default on loan payments. The point where the collateral is sold depends on the loan agreement. When the requirement for a collateral is not met, most probably, the lender will not grant the loan on this ground. Lenders would always want to secure their cash.
- Low income and cash liquidity
Fast cash loan lenders will require a borrower to show sufficient data that the business is earning and enough cash flow is coming in. They need to ensure that borrowers have sufficient cash every due date to ensure repayment of the loan is being made. If business lenders see that more money is flowing out rather than flowing in, then it is highly possible that the loan will not be granted.
Lack of preparation and not knowing these reasons may cause your application to be rejected. It is very important, as personal loan lenders, to ensure that reasons like these are prepared for. It will also give you, as a business owner, an idea on where your business is and what actions to take.