business loans for young entrepreneurs

Business Loans for Young Entrepreneurs

Young people nowadays are becoming more and more concerned for their future. At the early age, they aim for success. In Singapore, the government is encouraging young people to be entrepreneurs and found their own businesses. With enough time and energy, they can be successful. But such is not enough to start a business for an aspiring entrepreneur. Enough funding is necessary to kick start any business. People who want to start a business may consider getting a business loan. Although not having to take out a loan is preferable to debt, there comes a time when an entrepreneur needs more cash for working capital, expansion or to avoid a financial crisis. It also pays to have proper planning for starting and running a business.

Where to Get the Money?

“A journey of a thousand miles begins with a single step”, said Lao Tzu. For entrepreneurs, the first step is having proper funding. But where can young entrepreneurs get the necessary funding? In Singapore, a number of banks and financial institutions offer business loans for Small and Medium-sized enterprises (SME). It is the fastest way to get the funding you need. Many of these companies offer fast funding and flexible repayment terms with around 5% annual interest. SME bank loans can be as much as S$300,000 which can be in your hands as fast as 10 working days. Paying terms can be as short as a month to 12 months. It may seem easy for an aspiring entrepreneur but it can be more complicated than it looks. Most banking loans may require a respectable credit history, a good annual sales turnover and/or a few years in business. Because of the requirements, young entrepreneurs, especially those who are just starting, have a hard time in meeting the standards of the banks or supplying the necessary documents. There are however alternatives for young entrepreneurs who aren’t eligible for a banking loan.

Other Sources of Funding

Peer-to-Peer Lending (P2P/P2PL) can be another source of funding. It is the process of lending and loaning money to and from other individuals without going through banks and financial institutions. Although it is a bit unsecure, it is popular among businessmen because it’s quick and easy. In P2P, lenders can either compete for the lowest rate or the rate is fixed depending on the company. Lenders have the option of picking the right borrowers to lessen the risk of borrowers not paying back.

Another alternative is thru personal or business credit cards. Young entrepreneurs can start with a cash advance from their respective credit company. Although credit limits are not generally high, even a small amount to help the business may prove useful. Young entrepreneurs can also get their funding from personal resources. Aside from personal bank accounts, Aspiring entrepreneurs can loan from family and friends, which can offer flexible terms. The decision to make personal loans depends on your personality. There are a lot more ways to get the right funding or extra money for your business. With the right decision on where to get it, you can grow, achieve your goals, and continue being a good entrepreneur.

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