Quick Financing Tips for Startup Businesses

It can be challenging to obtain funds for a startup, especially if your goal is to work alongside traditional lenders.

Some banks are strict about who they will lend business loans to. These include those with high cash reserves, high sales volume, strong credit, and at least one year of experience in business. These strict lending requirements are often difficult for new businesses.

It is important to understand your goals and financing requirements before you can choose the best type or funding. However, many top banks are now starting to provide assistance with government grant for SME. You can also consider other financing options.

Self-financing your business

Self-financing or personal investment, is one way to finance startups. You can get financing from a government entity or a private investor, but they will also ask how much capital you plan to invest in your startup. If you have savings, investing in them is an option. Business loans can be obtained in later stages of your business. Lenders will be more inclined to lend it as they will take into account the stability and risk factors.

Finding an angel investor

Angel investors are individuals who have extra money to invest in new businesses in Singapore and around the world. Angel investors are more risky than loans from financial institutions, as angel investors invest to maximize their profits. For funding assistance, SME business owners may contact angel investors directly.

Crowdfunding

Crowdfunding, in a nutshell is a method to raise money from many investors for major business purposes. Crowdfunding is a way to raise funds for new business owners. It also promotes social and cultural causes. Crowdfunding portals can also be used to raise funds for charities, disaster relief, and ideas. Indiegogo and Kickstarter are the most popular Crowdfunding platforms.

Business credit cards

Credit cards are a good option if your business doesn’t initially require large sums of money. Due to the rise of startups, credit cards for business purposes has increased. Pay on time to avoid any penalties or additional interest.

Peer-to-peer lending

Peer-to–peer lending allows borrowers to borrow without the need for intermediaries. Lenders and borrowers both benefit from peer to peer lending institutions. Lenders lend money and borrow money from borrowers to make their investment. Borrowers then get money for their own business. Because the interest rates are higher than those charged by banks, MFIs, or NBFCS, lenders in this model can make more money from borrowers.

Government grants

Entrepreneurs in Singapore are supported and encouraged by government grants for SME. You can leverage a bank’s assistance for grants, including COVID-19 Relief Loans, SME Fixed Assets Financing, Merger & Acquisition, Venture Debt Loan, Enterprise Financing Scheme Trade Loan (EFS-TL), and Project Loan.

These are the most common financing options to fund your startup. Among all the options, at least one of them should be able to help you get funding.

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