Many business owners, especially those veterans, would agree to the old saying, “You need money to make money.” Indeed, up until now, this saying remains true, which is why finance companies in Singapore offer loans to give a hand to those having a hard time establishing their business.
Fret not since it is not a bad thing to ask for help. The truth is, it is the opposite. It is better to do something than expect a business to grow without doing anything. Therefore, do not hesitate to ask finance companies in Singapore for help. They could give the financial assistance that you and your company needs.
Once you have decided to seek financial assistance from them, business vehicle loans are one of the resources they could lend you. The purpose of this is to help you buy a commercial fleet. As a result, you could personally deliver the order of your customers through their doorsteps.
To learn more about vehicle finance solutions, keep your eyes peeled and read the following carefully. Consider doing them as well if you have plans to apply for one later on.
How Do Business Vehicle Loans Work?
Now that you know what business vehicle loans are for, you must grasp first how it works before applying for one. Once you do, it will be easier for you to negotiate and get better terms and conditions from your chosen finance company.
Here is a breakdown of its primary fundamentals.
All types of business vehicle loans have interest rates. They are a small proportion of the borrowed amount that the borrower needs to pay for until the maturity date.
Usually, finance companies in Singapore ask borrowers to pay at least 2.45% a year for new cars and 2.59% for second-hand ones. However, you may expect to get lower interest rates if they deem your application is better than average.
Amount of borrowed money
As mentioned, this money is the amount borrowers receive once they get approval. For example, the cost of a commercial fleet is S$50,000, and the amount the finance company could lend is up to 70%. That is an equivalent amount of S$35,000, and the remaining would go through you out of pocket. That means you have to pay for it using your savings.
Repayment terms and conditions
At this point, you already know how much they could lend you and the interest rate you need to pay. The only thing left is up until when you could pay back the money you borrowed.
On average, the business vehicle loans could last for five years, and more than that, the finance company needs to review your application if they could allow you to extend the turnaround time.
You would also find out what payment modes they accept and how often you could pay your debt in a year. Most often than not, your choices are monthly, quarterly, and yearly. However, ensure you will not have a hard time paying it back, choose monthly payments.
Ensure you understand these three primary fundamentals before applying for business vehicle loans. You may contact any finance companies in Singapore if you like to get in-depth information about this matter. Just make sure you let them know you are still inquiring and not applying for it yet.
What Should You Do and Avoid When Applying for Business Vehicle Loans?
With one click, you can get loans from any finance companies in Singapore. All you have to do is satisfy their requirements and wait for their approval. However, you must make rational decisions with your application. That ensures nothing will go wrong in the long run.
Here are the pointers you must remember to do.
Dos of Business Vehicle Loans
● Conduct a business assessment.
Before applying for vehicle finance solutions, you must know first the current condition of your company. Is it indeed a commercial fleet? If so, does your company have enough cash flow? You will get the answer to these questions after conducting a business assessment.
● Have careful research.
The matter that you need to do careful research on is the type of commercial fleet your business needs. Thoroughly do this to know if the vehicle you will be purchasing with the loan is worth it.
You might also want a background check on the finance company you intended to borrow money from in Singapore. Doing so would prevent you from getting scam and get better business vehicle loans.
● Only borrow what you need.
Even though you could borrow more money, only ask for what you need. Otherwise, you might have a hard time finding a way to pay those back. You might even consider applying for another loan to repay your previous one, but that is a bad idea. It would only cause you to have more debt later on. Therefore, only ask for the exact amount of money that you need.
● Pay on time
That is the only way to maintain a good credit score. If you pay your loan later than the agreed date, there will be an adverse effect on your credit score. As a result, you would have a hard time applying for a loan the next time you need some extra money.
Don’ts of Business Vehicle Loans
● Spend your loan on other things.
Since you will be applying for vehicle finance solutions, you cannot use them to buy a property or other things on your bucket list. If you do, the finance company has the right to file a complaint against you.
● Overlook the loan eligibility requirements.
Every finance company will have eligibility requirements that differ from one another. Therefore, the information you probably know does not apply to their criteria. That is why besides filling out the business vehicle loans application, check what requirements you need to satisfy first to become eligible for the loan.
● Forget your elevator pitch.
Presenting this matter is your only chance to showcase your business as a reliable receiver of business vehicle loans. To guarantee your elevator pitch, show them all the required documents they need. Give them reasons why you need to receive that amount of money and what kind of vehicle you would get once you get approval.
● Neglect to ask about their penalties.
Since no one is perfect, you could forget some things you need to do. One of which is paying your loan on its monthly due. When that happens, you have to settle your loan payment along with your penalty. Otherwise, there will be some change in your credit score.
These dos and don’ts would not only increase your chances of getting business vehicle loans approval but also help you negotiate better with the finance company. That is why you have to keep everything on the list in mind.
How to Get Business Vehicle Loans Approval?
While the success rate of business vehicle loans approval is relatively high, borrowers should not be complacent since there many factors the finance company needs to consider first. Indeed, you will get overwhelmed by those criteria if you do not prepare them ahead of time.
Therefore, let these pointers help you increase your chances of getting business vehicle loans approval.
Maintain a good credit score.
A good credit score means you are paying your bills on time. That is why it is pleasant to the eyes of any finance companies in Singapore.
To check this status, request a copy from Credit Bureau Singapore or SingPost. Make sure to prepare some money since they often charge upon request.
Check the minimum income requirement.
You have to since each finance company offers different vehicle finance solutions. The amount you probably know may not be the same amount the others suggest. That is why get this information clear to know whether your income is enough to become eligible to apply for a loan.
Besides filling out the business vehicle loans application, the finance companies will always ask for more data. To satisfy that, the borrowers like you need to present some documents.
Here are the files they might request you to submit.
● Deed of ownership
You have to provide this paper to prove that you are the rightful owner of your business. If you own a corporation, you should have at least over 20% of ownership in the company.
● Business records
In most cases, you can only purchase or hire a car in Singapore if your company has been in business for at least two years. If you met that requirement, the business records you need to get are tax returns and cash flow statements.
● Personal information
If you are the sole proprietor of your business and it under your national ID, then you and your business act as one. That means you can be the guarantor once your business fails to pay off the business vehicle loans.
● Collateral documents
Vehicles tend to lose their value over time. That is why finance companies do not allow more than seven years of business vehicle loans. Sometimes, you can, but you must prove to them that your business indeed needs the vehicle. That same goes for when applying for a COE renewal loan.
Add a co-signer.
Having a guarantor increases your chances of getting approval. That is why you have to ask the right person, so they could be your beck and call no matter what happens.
Make sure before they sign any paper, they know what their responsibilities are. As such, they will get shocked if they receive any notification from the finance company.
Business vehicle loans are a big help in purchasing a commercial fleet for your business. Therefore, if you ever need to apply for one, follow these tips above. It will help you get approved.
What Are the Terms Used in Business Vehicle Loans?
Before applying for business vehicle loans, you must know first the terms often used. It will help you get a clue how the financial assistance works and what the conditions affect you.
Here, learn the terms used in business vehicle loans.
These are finance companies that lend money to businesses so they could establish themselves as soon as possible.
The amount of money the receiver agreed to borrow from the finance company. The borrower and lender agree on the amount right before signing the contract, and the borrower received the dated cheque.
This word means the borrower violates the terms and conditions they signed when they got approval from the finance company. When this happens, borrowers have to pay for the breach of contract they cause.
The final date when the borrower needs to pay back the business vehicle loans they applied for. The turnaround time of this matter often lasts for 60 months. Or longer, depending on the agreement made.
This acronym stands for annual percentage rate, and it refers to the total interest fee a person would need to pay for a year. Knowing this amount allows borrowers to compare which vehicle finance solutions are better for them.
This one refers to a slip that proves who owns the commercial fleet vehicle.
Understanding the terms used in business vehicle loans help you know how it works. Therefore, guarantee that you know them well before seeking financial assistance from finance companies in Singapore.
Are You Ready To Rely On Vehicle Finance Solutions?
As mentioned above, there is nothing wrong with seeking help from finance companies. Through their business vehicle loans, you could purchase the commercial fleet your business needs as soon as you can. That is the difference you could gain. Instead of waiting until you save enough money to buy the commercial fleet, you could get them now and pay the cost later. As such, the growth of your business would not get delayed due to a lack of money.
Therefore, when you think you are ready to rely on vehicle finance solutions, get them at SweeSeng Credit! They will lend you a hand in taking your business to new heights.
Visit their website today and fill out their business vehicle loans application.