Guide to Retail loans

There are a variety of different retail loans available in Singapore. In most cases, these loan options are used by small business owners to purchase inventor/Resources or to maintain/increase capital. Personal loans such as car financing, medical loan, and house loans also fall in the category of retail loans.  

It is completely up to you to decide which type of retail loan you should go for since these loans are not based on the situation and condition of your business. Having so many different varieties of loan can sometimes be confusing. Since retail loans are one of the easiest and effective ways to raise money for your venture, it is necessary to opt for the one best suited for your situation.  

While this might seem like a dream come true, banks/lenders take into consideration several factors before approving a retail loan application. Lenders require reassurances that you can pay them back before they lend you the money.  

In the following article, you will learn all that you need to know about retail loans. What are the requirements of the banks/ venders? How can you satisfy their requirements? The answer to all such questions is discussed below. 

Things to know about retail loans in Singapore: 

Many banks and private money lenders provide retail loans for a location such as a mall or a retail shop. There are various details that are required for the approval of such loans, and lenders take into consideration many factors to determine the interest rate. The interest rate for retail, commercial loans is higher than residential, retail loans.  

It is one of the best ways to raise funds for business or to invest in a business idea. However, banks and private money lenders require certain assurances before they provide you with the funding for your ventures. They have to make sure that you will be able to pay them back with interested and for that reassurance, the following factors are considered.  

  1. Credit Score 

The credit score is the most important factor for any bank/ lender. If your credit score is low, then it would be harder for you to get approval for a retail loan from a bank. In the eyes of the bank, lower credit score means late repayments which the bank cannot tolerate.  

You might find some private lender willing to fund you even with your low credit score; however, the less your credit score, the more your interest rate is going to be on your retail loan. This will increase the amount of repayment considerably. 

Credit scores are lowered when you are unable to make your earlier repayment to the bank on time or if you have some pending payment. It is best to clean up your credit score before applying for a retail loan. Not only will that help you get easy approval from the bank but also reduce the interest rate on your retail loan.  

  • Qualification for the loan 

While a credit score matters a lot, there are some other factors lenders take into consideration before granting you funds. A lender may ask you about your property and other assets to evaluate your financial condition. This is for assurance of the lenders so they can evaluate if you are able to complete the loan payments without delay.  

Having some other commercial or residential property will help you get approval for your retail loan. There are some other concerns that a lender will look out for before providing you with the funds.  

  • Worth of your property 

Having property or assets is not enough. Lenders take into consideration the appearance and worth of your property. Your assets must be in good condition since in the near future you might need more capital to improve your property, and its value might be less than the loan amount. A lender will take into consideration the total worth of your assets before lending you the funds. If the value of the property is less than the amount of the loan, there is a very solid chance that your application for a retail loan might get rejected.  

These are the main factors than any bank or lender will take into consideration before accepting your retail loan application. It is better to have your affairs in order before applying for any such loan option. These are the main factors you should be aware of before applying for a retail loan in Singapore. You can address your lender for further details. 


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