The MicroLoan Programme (MLP) is a funding scheme spearheaded by the Singapore Government, in coordination with local banks aiming to support local business start-ups with funding for business operations and expansion. Loan quantum varies, which depends on the ultimate assessment by the financer but MLP typically lends up to SGD $100,000 max. This scheme will be ideal to SMEs that may be rejected by typical business term loans offered by banks.
The following items will help to ensure the successful approval of your microloan:
Prepare a Strong Case
The first thing you have to do is plan how you can throw the capability of your business. This will verify to the banks why you be worthy of their loan. By preparing the following items, you will have a high chance of securing a bank loan to set up your company.
- A business profile from Accounting and Corporate Regulatory Authority (ACRA)
- Your bank statement
- Cash flow projections
- Profit and loss statements
- Audited balance sheets
- Personal income tax evaluation of all owners and directors
- Presentations of your business plan
- Any other supporting documents to show that you are creditworthy, such as large purchase orders.
Thus, maintaining appropriate bookkeeping and accounting records is very important in getting a bank loan for your company. Otherwise, you can also look for professional accounting and bookkeeping services to help keep proper books for your company.
Be Sure Of Bank Charges
It is essential that you are crystal clear on the fine print of charges you are subjected to when you apply for your bank loan. For instance, you must be certain that the bank will not charge you for non-withdrawal if you do not utilize your line-of-credit. Your negligence to pay attention to such fine print on fees or unseen charges can spell a ridiculous excess in the money you may owe the bank.
Maintain a Good Credit Score
Since your startup lacks a credit history, it is your personal credit rating as a business owner that will be scrutinized by banks before sanctioning a bank loan. In fact, the smaller the size of your business, the more intensely you will be evaluated on your experience, knowledge and overall character. Pumping in some of your own cash into your startup can also help to increase the likelihood of securing a bank loan.
Discover Your Company’s Future Needs
Banking needs you may not need for your startup now may become vital as your business leaps onto dynamic growth. Similarly, you may be content with just online banking services now, but not when your business needs a more interpersonal approach from a relationship manager in the future. One way to avoid such problems in the future is to identify your company’s needs, and then select the banks that provide the best service to match those needs at the lowest costs.