10 Outstanding Banks and Financial Institutions in Singapore That Provide a Wide Range of Loan & Financing Services

How to Find Loan and Financing Services Assist in Business Expansion Opportunities

From the loan's approval until it is fully paid off, all actions are categorised together as "loan services." It encompasses a wide range of legal and financial complexities that lasts up to years if the debt isn't fulfilled. Loan services enable customers to easily manage their loans with convenient solutions tailored for everyone involved to help them pay off their debts efficiently.

Financing services is a general term for the finance industry, covering institutions such as investment banks, credit card companies, insurance companies, and stock brokerages dealing with money management. Specifically, financing services are the services this sector offers to facilitate transactions and investments.

The market comprises an impressive range of financial firms providing money and investment-related activities. Hence, loan and financing services generate the highest revenue in the global financial landscape.

How Loan Services Works

It is imperative for banks, financial institutions, non-bank entities specialising in loan servicing and third-party vendors providing services to lending institutions to ensure that all borrowers meet their payment obligations on time. This is essential for maintaining creditworthiness with lenders and demonstrating good faith in credit agencies.

Loan servicing was one of the main duties originally performed by banks. This made sense because the bank had initially issued the loan. But then securitisation (bundling of assets to be sold as interest-bearing securities) came about, altering banking and finance entirely. Once loans – particularly mortgages - were packaged into securities and offered outside a bank's books, managing them became less lucrative than originating new loans.

Owing to the record-keeping burden of loan servicing and borrowers' ever-changing expectations, a division between servicer and originator emerged in the loan life cycle. This made software solutions and technological advancement necessary to become pivotal aspects of this industry.

Importance of a Financial Service

Singapore's financial services have enabled the nation to strengthen its economic condition and progress in all sectors, significantly improving its economy.

Singapore's economic growth benefits its citizens by offering them higher standards of living. Financial services make this possible by allowing individuals to access consumer products through hire purchase methods. In addition, these financial institutions also earn profits from their involvement in investment, production and saving activities - all of which further contribute towards boosting the economy's prosperity.

Subsequently, we emphasise the significance of financial services through the following points:

• Promoting investment

When there is an increased demand for products, the producer needs to invest more to meet this. Financial services can then step in and help the investor - such as a merchant banker - by providing funding through the new issue market. This assists producers with raising capital so they are able to fulfil clients' needs.

By investing in the stock market, investors are able to mobilise more capital and entice foreign investments. Additionally, factoring companies (both from inside and outside of domestic borders) enable producers to sell their products and put up funds for modern machinery or technology that aids them in furthering their production processes.

• Maximising the returns

Through access to financial services, business owners have the capability of unlocking their highest potential returns. This is thanks to credit that is secured at attractive interest rates. Business owners leverage a variety of loan options to purchase assets and even opt for leasing high-priced items when needed.

By partnering with a factoring company, the seller and producer skyrocket their profitability. Even in competitive markets, producers are able to sell merchandise for low margins without sacrificing turnover or profit. Through increased stock movement, they can optimise their return on investments.

• Ensures greater yield

Distinguishing between return and yield is essential as it helps producers make more profits, gain greater wealth, and meet the needs of consumers. Yield uniquely draws in producers to enter the market and increase their production. Financial services allow them to maximise their current wealth while earning higher investment returns.

Enhancing their reputation and diversifying investments, financial services offer investors an opportunity to maximise returns in the stock and derivatives markets. With these options available, there is ample potential for a higher yield on investment.

• Capital market

The capital market is a reliable indicator of any economy's vibrancy and wellness. If the stock market is bustling with activity, economic conditions are favourable. The financial services industry ensures that companies have access to sufficient funds for production expansion and higher yields in profit margins down the line.

A scarcity of funds will result in the stagnation of businesses and a decline in capital market growth when financial services are lacking. Meanwhile, foreign investment is attracted to active markets with abundant services. Hence, access to reliable expertise drives changes within said markets; with it, progress is maintained.

• Promotion of domestic and foreign trade

Financial services are instrumental in bolstering both domestic and international trade. Companies that specialise in factoring and forfeiting provide the necessary push to increase sales of products within the home country as well as abroad. Banking and insurance services further facilitate these promotional activities, thus enabling an even higher growth rate for businesses worldwide.

Factors That Influence Business Loan Approval

Whether you manage a burgeoning enterprise needing to increase one of its branches, operate a small business striving for growth or are an up-and-coming business owner, procuring funds at the ideal moment is your priority. It's crucial to highlight the term 'ideal moment' because delays in disbursing capital from financial institutions could lead to missed opportunities.

Knowing the importance of loan disbursal speed, it is integral to be adequately prepared for your business loan application process. The last thing you want is rejection, which could lead to disastrous consequences.

If your company is searching for a business loan and you want to know all the factors involved in securing one, here are five factors that will affect its approval.

• A good credit score/history

Achieving a successful loan application begins with having an excellent credit score. Financial advisors agree that it is critical for entrepreneurs to maintain their credit ratings as high as possible since lenders take note of the business owner's credit standing when making decisions on small business loans.

Those with a credit score of 720 or more are rewarded with competitive interest rates. However, the absence of banking institutions leaves those needing business loans with less-than-ideal credit scores high and dry. However, Nonbank Financial Companies (NBFCs) meet this requirement by providing new business loans for borrowers as low on the scale as 500 points. Therefore, numerous small businesses take advantage of NBFC's fast-track funding availability and convenience.

Establishing a favourable credit history is the key to securing business loans. It is essential to pay your dues on time, maintain transparent transactions and invoice each purchase from vendors to build trustworthiness and obtain positive results when applying for a loan.

• Age of business

When granting business loans, banks & NBFCs consider the age of a business, cash flow statement and transactions. Small business owners are presented with a relatively higher annual percentage rates than usual. This term refers to the annual interest rate incurred if you don't pay off your credit card balance in full each month.

Once you demonstrate some growth in your company, conventional creditors will offer attractive interest rates. Fortunately, smaller companies take advantage of various private loan choices as well—all that's required is to determine the best rate for your venture by utilising a business loan calculator.

• Collateral

Financial institutions often require small business owners to use their assets as collateral when securing a loan to minimise their risk. Fortunately, lenders are flexible and allow the use of stock, equipment, or other similar company resources for this purpose. Alternatively, NBFCs even offer completely collateral-free loans for smaller businesses.

• Type of business

When applying for a loan, the type of business you're in is an important factor. If your financial partner views your enterprise as particularly risky, you need help getting approved and being charged higher interest rates. To ensure that they are on board with supporting your vision, do thorough market research about the potential of having this kind of business.

• Business plan

Whether you're a new business owner just starting or an experienced one wanting to expand your company, it's essential for success that you have a plan in place before seeking funding from banks and NBFCs. An impressive business plan will ensure that the process is made much smoother. To craft an exceptional proposal, include information such as the purpose of obtaining loan funds and long-term vision.  

When Should You Begin Looking for Small Business Loans

When forming your Limited Liability Company (where members are not personally liable for the company's debts) or any other business structure, it is important to locate a suitable bank for small business accounts as soon as possible. Furthermore, you must acquire a valid business license to create an account. Therefore, ensure that the prerequisite is fulfilled before searching for banking facilities.

When selecting the optimum banking solution, forecasting is essential. Estimating transaction loads and amounts and other business practices pose a problem, particularly if your firm has ventured into new territories. Suppose you're having difficulty answering questions raised before this section, just the uncertainty factor when making decisions. When faced with doubtfulness, it's wise not to rely on extremes for answers.

For instance, you should opt for an account that balances high and low transaction counts. Furthermore, open two different checking accounts with banking institutions whose terms are at the opposite ends of their range. When your business grows enough so you can accurately predict the daily activity and transaction levels, activate each one accordingly - make sure to retain whichever is best suitable for your operations.

How to Choose the Right Bank for Your Small Business

Setting up a bank account for your business requires more consideration than just visiting the same financial institution where you have a personal account and opening another one. Your company's banking needs will differ from yours, so it is essential to find an appropriate enterprise bank account, as this is essential to ensure monetary accomplishment in the future.

If you're launching a business or searching for another bank, consider your present requirements and how the bank will develop with you. Your choice must be able to adapt and advance along with your company's growth. As you search for the perfect bank to meet your needs, these points should be top of mind:

• Select the ideal location for your needs and then fire up your search engine to find banks in that area

To narrow down your search for banking options, start by selecting an area that is convenient to you and analyse all of the banks within it. Please write down the names of any prospective banks and their contact info on a notepad. Give them a call and inquire with the bank manager about important questions regarding services offered and fees charged.

• Choose ideal size

To ensure you find the financial institution that best suits your business, starts by filtering for size. If your company requires a large number of transactions and has more than ten workers, look into larger banks, as they are possible to be better equipped to handle higher levels of daily activity.

There is no better option for those with a small business than a smaller bank where you can take advantage of the personalised support they offer. An honest bank manager should be able to tell you whether their services are suited for your business model.

• Run a credit check

If you have plans to acquire a loan in the future, obtaining your credit report is an essential first step. Understanding how financial institutions will evaluate both yourself and your business help provide valuable insight into what borrowing options are available to you. A credit report is an effective tool for any small business owner, providing them with invaluable financial information.

• Determine the most valuable perks 

Depending on the size of your business, certain perks and incentives are more beneficial than others. For instance, if you have a large team in place, it could serve to investigate larger banks that offer employee benefits such as corporate credit cards. Meanwhile, smaller businesses are possibly able to take advantage of tax preparation services which could provide significant savings over time.

• Look into a credit union

Credit unions offer an excellent alternative to large banks if you value customer service and need a straightforward financial solution. Community-based credit unions tend to be significantly smaller than national banks, providing small business owners with the personalised attention they crave.

• Determine the level of support you need

All business owners have unique needs; those new to a business require greater assistance than professionals. Understanding your ambitions is critical for finding the right support from experienced banking professionals.

Loan and financing services are a great way to get the funds you need for your business. However, certain risks are associated with taking out these types of loans. It is important to research and ensure that you understand all of the terms and conditions before agreeing to any loan or financing service. Be sure to weigh the risks and benefits of taking out a loan or financing service before making any decisions. Finally, it is important to make sure that you are comfortable with the decision and will be able to pay back the money promptly. With careful consideration, loan and financing services provide a great opportunity for your business.

Look through our banking companies to learn more about how their services allow you to spend your money wherever you choose for your business.