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What Is The Best Local Bank for Business Loan?

If you are a Small and Medium Enterprise (SME), chances of you applying for a business loan are pretty high. At some point in time, you are inclined to take up a business loan, especially when looking to grow your business. We all know that the Singapore government has partnered with banks and financial institutions for schemes like the Temporary Bridging Loan and Enhanced Working Capital Loan, making financial aid readily available for SMEs.

Financial challenges posed by the COVID-19 pandemic may make you inch towards the support schemes by the government. Moving forward, you may wonder what the best local bank for business loans is. Here we have it summarized for you, drawing a comparison across the 3 big local banks – DBS, OCBC and UOB.

Let’s take a look at the respective banks standard business loans package, without taking into account the government-backed business loans.

 

 

Evidently, there are not stark differences in the business loan packages offered by the top local banks in Singapore. However, you face more restrictions when applying under UOB given that the loan amount is capped at the lower of $350,000 and a shorter repayment period of 3 years.

 

Many companies may face financial constraints during this period and with many companies taking up a business loan, banks and financial institutions may lean towards tightening their lending policies as they cannot afford to take up so much risk. Hence, here are some tips in securing a business loan!

 

  1. Try to enquire another bank besides your company’s operating account bank

You definitely want to find the best loan package for your business so that you can maximise your interest savings and other benefits. Therefore, no harm getting the rates from other banks and learn about their terms and conditions so that you will not land yourself in a highly inflexible package. You can try a bank that you have never had an account with because they would be eager to convert you (who is a first time customer) to come onboard with them. As a result, more attractive rates or promotions may be available for you.

 

  1. Do not take the interest rates without some negotiation

Always remember to try to negotiate for more competitive rates. Do not immediately commit to the interest rates they offer you because chances are, you might just secure lower interest rates or earn yourself some incentives. However, you have to understand your own bargaining position. If your company has a poor credit rating, it would already be tough securing a loan let alone negotiating for lower rates.

 

  1. Engage a business loan broker

A business loan broker has a vast network of connections with people working in the banks. With the experience and expertise, they can better gauge your likelihood of securing a loan as compared to you trying to figure things out yourself. Their strong networks with the relationship managers at banks and financial institutions could help you secure more competitive interest rates as well. If you are not confident of the points as mentioned above, hesitate no further in engaging a loan broker. They can do the job for you, saving you tons of hassle.

 

Avant Consulting offers professional advice in guiding you through your loan application process. If you are looking beyond the business landscape, Avant Mortgage provides advisory work for mortgage loan applications as well so if you plan to refinance or take up a new housing loan, you can approach us too!

 

 

References:

https://www.uob.com.sg/business/finance/bizmoney-business-loan.page

https://www.dbs.com.sg/iwov-resources/forms/sgsme/en/financing/working-capital/business-term-loan/reference-guide.pdf