Overview

• The perfect loan application gives the lender a comprehensive view of your business and communicates clearly how the loan will help your business.
  
  
• Your loan application should always paint an honest and truthful picture of your business.

• It should contain only facts. Marketing talk and overstatements of your business' achievement will cast doubts on your loan application.
  

The Loan Proposal

General Rules

• Keep your loan proposal brief and factual. Lenders will not have time to read lengthy proposals, however impressive they are.
  
  

• Never assume that the lender is familiar with your business. The more you tell your lender, the better.

  • If you are asking for a loan to expand your business because there is an increased demand, explain this industry trend to the lender.
    
    
  • If you need a loan because your customers need longer credit terms, assure the lender that your customers will be able to pay up.
    

• Type of loan you are looking for
• Amount of loan
• Why you need the loan
• How you intend to use the loan
• What the loan can do for your business
• How you intend to repay the loan

Outline Details On Your Business

• History and description of the business
• Background of the management team
• Market information about your products and services
• Financial history of your business
• Financial projections
• List of potential collateral and their values

Financial Documents To Prepare

• Attach the financial documents to your loan proposal. Generally, all lenders look for the same financial documents.

• Your records should go back at least 3 years. They should be audited or certified.

• However, if you are a start-up or new business, the banks will waive the 3-year requirement if you are applying for loans tailored for start-ups and small businesses.

Business Financials

• Business profile from the Accounting and Corporate Regulatory Authority (ACRA)
• Quarterly bank statements
• Cash flow statement
• Profit & loss statement
• Balance sheet

Financials Of Owners And Directors

• Copies of NRIC or employment pass
• Income tax statements

Additional Financal Documents

• If you are a small business, sole proprietor or partner, the lender may also require you to provide:
  
  
  • personal bank statements
  • declaration of personal assets
  • personal guarantee on the loan

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Other Supporting Documents

• The entire exercise of providing documentation is to help the lender establish that you are credit-worthy.

• If you have just signed a big contract or have just received a big order for goods, attach it to your loan application. The lender will feel more assured that you can meet your cash flow needs.

• If you are asking for loan to buy a building, factory, machinery or equipment, attach the invoice or purchase agreement

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