{"id":21401,"date":"2020-03-13T14:22:29","date_gmt":"2020-03-13T06:22:29","guid":{"rendered":"https:\/\/www.grab.com\/ph\/?page_id=21401"},"modified":"2022-07-18T17:44:54","modified_gmt":"2022-07-18T09:44:54","slug":"how-to-prepare-for-a-business-loan","status":"publish","type":"page","link":"https:\/\/www.grab.com\/ph\/merchant\/finance\/hub\/insights\/article\/all\/how-to-prepare-for-a-business-loan\/","title":{"rendered":"Prepare For a Business Loan | GrabFinance"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\n\t\t\t\t\t\t
\n\t\t\t\t\t\ticon\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
Home<\/div>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\t
\n\t\t\t\t\t\ticon\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
Products<\/div>\n\t\t\t\t\t<\/a>\n\t\t\t\t\n\t\t\t\t\t\n\t\t\t\t\t\t
\n\t\t\t\t\t\ticon\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t
Insights<\/div>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div><\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t

You are reading\u00a0How to prepare for a business loan<\/strong>\u00a0<\/span>under\u00a0Insights<\/span><\/a><\/span><\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t

How to prepare for a business loan\n<\/h1>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t

Running your own business is hard work. Meeting your business goals is harder. The right funding at the right time can make a real difference, but how do you know which loan is right for you?<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t
\"\"<\/figure>

5 mins read<\/p><\/div><\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t

Takeaways from this article\n<\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t
\"\"<\/figure>
You should start any business loan search with your own business objectives and goals. Plan for success.<\/span><\/div><\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t
\"\"<\/figure>
There are more options than just bank loans and credit cards when it comes to business funding.<\/span><\/div><\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
\n\t\t\t\t
\n\t\t\t
\"\"<\/figure>
Do your research and compare like for like to get the right funding option for your business.<\/span><\/div><\/div>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t

Running your own business isn\u2019t just about the freedom of being your own boss, it\u2019s about doing something you love, leaving an impact in the industry, and enjoying a strong sense of achievement every day. But sometimes to meet your goals, you need a helping hand in the form of some cold, hard cash.<\/p>

If you\u2019re considering applying for funding for your business, it\u2019s important to know what you\u2019re getting into. So let\u2019s get started.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t\t\t

1<\/h4>

Determine your need<\/h2>

Before you start, make sure you\u2019re clear on what your objectives are \u2013 why you need the funding and how you\u2019re going to prove to yourself it was worth the time and cost. It may be that your website needs a revamp, that you need temporary support from freelancers, that clients are paying invoices late and you need a boost to your cashflow, or that you plan to expand and open a new outlet or restaurant. Whatever you need the funding for \u2013 make sure you have a plan to use it right.<\/p>

At this stage you should also be identifying how much you need, how soon you need it, and how much you can afford to repay each week or month. Don\u2019t forget to consider any seasonal ups and downs your business might face \u2013 perhaps caused by public holidays or celebrations.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t\t\t

2<\/h4>

Know your options<\/h2>

New forms of business funding and loans are appearing all the time so your first step is to work out what kind of loan would suit your business best. That\u2019ll depend on things like what you need the funds for, how soon you need them, what your appetite for risk is, what kind of business you do, how well your business is already performing and how long you\u2019ve been in business.<\/p>

The most common forms of funding right now are:<\/p>

\u2022 Bank loans.<\/strong> These generally have pretty good interest rates but applying is a long, difficult process and it can take a long time to get the money. There\u2019s also often collateral requirements \u2013 guarantees the banks need in case you don\u2019t repay the loan, like ownership of your inventory.<\/p>

\u2022 Business credit cards.<\/strong> While convenient and often accompanied by reward points or cashback options, credit cards tend to generate much higher interest rates and fees. They\u2019re also easy to misuse, causing bookkeeping problems down the track as you sort out the business expenses from personal ones.<\/p>

\u2022 Lines of credit.<\/strong> Lines of credit operate in a similar fashion to credit cards but they don\u2019t have the physical card so you\u2019re less likely to get into trouble. Instead, you draw down to your bank account when you need funds, up to a pre-approved limit. They\u2019re not quite as convenient as credit cards but they offer less risk and chance of misuse.<\/p>

\u2022\u00a0Working capital loans.<\/strong>\u00a0<\/span><\/span>Working capital loans are provided by alternate lenders, like\u00a0GrabFinance<\/a><\/span>.<\/span><\/strong> They\u2019re like bank loans, but they tend to be easier to apply for and are approved much faster so you can get the funds sooner. They\u2019re also usually open to businesses that don\u2019t meet the eligibility requirements of traditional bank loans.<\/p>

\u2022\u00a0Balance sheet loans.<\/strong>\u00a0<\/span><\/span>Balance sheet lenders offer quick access to short-term funding requirements. Instead of looking at your credit scores, they care more about your business revenue and sales as you make repayments from each of your future sales. Because repayment is sale-dependent, these loans are generally kinder to your cashflow, but that benefit is offset by high fees.<\/p>

\u2022 Peer-to-peer loans.\u00a0<\/span><\/strong><\/span>Peer-to-peer lenders match you with people or companies looking to invest in small businesses. They\u2019re common lending options for startups and are growing in demand. Fees and interest rates are usually tailored to the risk to the lender and, because they\u2019re managed by a middleman lender, there\u2019s a commission involved.<\/p>

\u2022 Invoice financing.<\/strong>\u00a0<\/span><\/span>Invoice financing is a form of peer-to-peer loans where an invoice you issue is bought from you at a discount. It lets you skip the wait for your client to pay you and access the money you\u2019ve earned right away. In most cases, you\u2019ll receive between 80-90% of your invoice right away, then the balance, minus the lender\u2019s fees, when the invoice is paid by the client. Fees are typically determined by your invoice payment terms \u2013 the invoice due date.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

\n\t\t\t\t
\n\t\t\t\t\t\t\t

3<\/h4>

Do your research<\/h2>

Once you\u2019ve determined the kind of funding you need, start doing your research. Look for reputable lenders and check their requirements to make sure your business is eligible. Here they\u2019ll generally be looking at how long you\u2019ve been in business, what type of business you\u2019re operating, the industry you\u2019re in, how big your business is (how many staff you have \u2013 and less is usually more in lending), and your revenue.<\/p>

Check their loan terms and pay particular attention to:<\/p>