Whether you’re dreaming to launch your own start-up or already own a small business or an industry is run by you. Finances are the only need that will help you meet the goals. Your goals are dependent on the cash flow. Business can never grow without proper and planned financing. However, you might be here in search of different kinds of loans. We know research is always a better idea than relying on any vague information. You should always confirm the source and never forget to consult any professional for the matter.
There are many different types of loans. The list is too long to mention this one article. These types of loans differ according to the needs and demands of the business. You should always approach the right lender or bank to get the one that is suitable for you.
Well, the mid-term loan is the one that is most suitable for start-ups and small businesses. How? Let’s see.
What is Mid-term loan?
It is the type of loan with a repayment period of almost 2 to 5 years. Normally, these loans offer up to $500,000 in the capital. Payment is scheduled monthly or bimonthly according to the mid-market interest rate. The time duration of approval can be 2 to 3 weeks long.
How Medium Loans Work?
It works similar to the short-term loans and long term loans with the difference of repayment schedule. It also varies in terms of interest rates and qualification standards.
Qualifications for mid-term loans in Singapore
There are very basic requirements such as average credit, bank statement, and revenue of the business. Still, each lender has the choice to set its own standards of qualifications. However, if you will apply for a mid-term loan through a bank, you might need to put down some assets. Online lenders are even more flexible in setting standards. Apart from that, this is your call and no one knows about your business strategies better than you.
Advantages of Medium-term loans in Singapore
- Regular payments, spaced one month or two weeks apart, can be a great thing for businesses that are trying to budget for fixed costs.
- Medium-term loans usually have fixed interest rates. Having a set interest rate on a loan helps a business owner to know exactly what that loan is costing them over time.
- Receiving and successfully paying off a medium-term loan will improve an owner’s credit score and help you build business credit. As they move forward with their business, they will be more likely to get additional loans.
- Medium-term loans can be used for a variety of business purposes.
Disadvantages of Medium Term loans in Singapore
- It requires somewhat more paperwork and has a longer reversal than short-term loans.
- If you don’t have good credit or cash flow, you might not be able to qualify for a medium-term loan. It can also require collateral.
- Term loans can come with commencing fees and deposit penalties. So, you should be aware of all your obligations.