If you are planning on taking on a business loan Singapore then there are a number of things that you need to keep in mind. Business loans can be quite advantageous for the business but just like all things they can also have certain drawbacks. So before you take out any business loan you need to be fully aware of all the pros and cons of it. So let us look at some of them in detail.
● Start a business
A business can easily help a person start his or her very own personal business from scratch. If you something to provide as collateral then you can secure hefty amounts as well.
● Debt repayment only
The best thing about some of the business loan providers is that they are mostly concerned with the repayments only and are not interested in your profits.
● Low interest rate
Business loans have low interest rate as compared to any other means of financing that you might encounter in order to start a business or cover the business expenses.
● Deductible on taxes
The best thing of all is that your repayments act as deductible allowance on your taxes which reduces the amount of tax that you will have to pay for your business.
● Immediate use
Most businesses loans can be availed within days if you fulfill all the requirements. So you can immediately get your hands on the funds which you can use in whatever way that you wish.
● Strict Guidelines
There are a lot of strict guidelines when it comes to acquiring business loans from the banks. Most of the new business can’t abide by all those guidelines which make it impossible for them to get business loans.
● Fluctuating rates
Most business loans come with fluctuating rates. The problem with that is they do not consider the profits so even if you profits are low you will have to pay higher amounts of interests which will lead to loss.
● Insist for collateral
Almost all banks and organizations ask for some kind of collateral and everyone doesn’t have that so it becomes impossible for a small business owner to get business loans.
● Affect the valuation of your business
Since the business loan that you get from the bank is under your business name thus it appears as a negative balance in your statements which affect your business’s valuation in a negative manner.