Business financing requires full and thorough preparation

Business financing is important to grow and expand your company, but if you are not totally prepared for scrutiny, you may never get the credit which you so badly needs. 

By: Hitesh Khan/

Whether your business is just starting up or preparing for expansion, credit can help support your short and long term financial goals. You will find there are a number of benefits to having business credit, but before you apply, it’s important to determine whether your business is ready for credit.

Follow these tips to ensure your business is fully prepared to obtain business financing:

1. Review your credit history for business financing

Lenders will thoroughly examine both your personal and business credit history before making a credit decision. Before you approach a potential lender, request a copy of your personal credit report. If you find errors in your credit report, contact the credit bureau.

2. Gather financial documents for business financing

You will likely need tax returns and financial statements for your business if you are applying for a term loan or line of credit. For a Small Business Administration loan, you may also need to present a formal business plan.

business financing
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3. Determine how much capital your business needs before applying for business financing

Before you walk into the lending office or fill out a credit application form, figure out exactly how much money your business needs to borrow, and make sure it’s a realistic amount. If you’re not sure how much capital to ask for, consider consulting a financial professional. He or she will closely examine your cash flow and current debt load to determine how much financing you actually need. Also, be prepared to tell the lender how you plan to use the money.

For example, you may explain that you will use the capital to pay for additional office space, furniture or equipment.

4. Understand all your lending options for business financing

It’s important to identify all the lending options available to you and determine which one is the best choice for your business. You will also want to consider the process and the timing. For example, loan decisions below $100,000 may be based on your credit profile and basic information, while larger amounts may require a detailed review of your finances.

5. Consider payment terms for business financing

You also have to decide how long you will need to repay your credit. There are short-, medium-, and long-term loans, and they all have positives and negatives. For example, if you expect to be able to pay back the money quickly, a short-term loan may be the best choice.

While preparing to apply for credit, you’ll need to gather key information and required business documents to support your application. The requirements will vary greatly depending on the type and amount of credit, from basic information for a credit card to full financials for a major term loan.

For more complex loans, you may need to provide additional information. For example, in the case of a commercial real estate loan you will need to provide some property related documentation.

What: Business and personal information


Why: You’ll need to have all relevant names, dates, and numbers handy to complete an application — including bank account numbers and balances for business and personal accounts, as well as annual revenues for the business.


What: Business entity paperwork and permits


Why: Whether your business is a limited partnership, private limited company, or some other type of entity, you may need to include the entity documents, as well as any important licenses or permits.

What: Business financials


Why: Your balance sheet provides information on your assets and liabilities at a point in time, while your cash flow statement provides a critical metric for a lender in terms of your cash flow over time. If your finances aren’t well organised and you find it difficult to generate this information, then it may be a good time to re-examine your accounting practices.


What: Personal income statement


Why: Even for a well-established business, the owner’s personal finances still play an important role. Your 2-year income tax statements, and a statement of your annual household income reassures the lender that personal financial needs aren’t likely to affect the business, and conversely, that you could help support it with your own resources if necessary.


What: Tax returns


Why: For larger loans, you’ll need to provide both personal and business tax returns for the last two years. This record is important to ensure the business has the income claimed and the ability to service all debt, including the new financing.


To present a strong credit application for business financing you should engage a loan specialist to help you avoid common application mistakes.

How to Secure a Business Expansion Loan Quickly

If you are searching for a business expansion loan, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

Contact us for home loan or refinancing advice.

Written by Ravi Philemon


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