Manufacturing is the backbone of any industry. It is continually at work and contributes a lot to the economy. It is beneficial for any country to have strong manufacturing industries, and Singapore understands this fact. To keep such industries running these business owners need to have the right capital and finances at the right time. Not being able to meet operational cost, equipment cost, transportation cost, or the inability to produce capital at the right time can leave their business devastated.
At such times of need, manufacturing loans can help keep the cash flowing. These small business owners need cash flow to maintain seasonal purchasing and emergency financial needs. If for some reason, these business owners are not able to maintain their seasonal purchases or fail to meet emergency capital needs, it can leave their business devastated. Many such cases result in bankruptcy. Fortunately, there is a variety of manufacturing loan options in Singapore. It is best to apply for those most suitable for your business.
The type of loan you should apply for remains mainly on your business condition and situation. You have to do some research and keep an eye out for the respective policies because every manufacturing loan has different conditions and requirements for the loan.
- Small business Loan
Small business loans are often provided by small banks or private intermediate lenders. The conditions for small business loans are feasible, but you are at a higher risk. You might be tempted to apply for it considering their flexible repayment conditions; however, sometimes the duration can take up to 20 years.
One more thing that you should be aware of before applying for a small business loan is that it is an extensive process to get approval. It can take up to a couple of months to get approval for funding. Make sure to plan before opting for a small business loan.
Equipment Financing Loan
When it comes to equipment financing loan, a lender directly lends your finances to obtain the equipment you need. In this type of manufacturing loan, the amount of the loan, and the terms of payment depend on the value of the equipment.
Through an equipment financing loan, you can get any type of equipment from heavy machinery to a simple computer. The terms and conditions of the loan are decided on the type of equipment being ordered. You can order any type of equipment through this manufacturing loan.
In the equipment financing loan, your equipment is collateral. It means that if you are, for some reason unable to pay back your loan, the company will seize your equipment. Such loans are self-secure loans. The good thing about loans is that they have a very low bar for a qualification which means you can easily get approval and funding.
- Invoice Financing Loan
In this type of manufacturing loan, you work directly with a lender who lends you 85% of the value of your unsettled statements. After you are funded, the lender issues the remaining portion as their fee. This is one of the best choices if you require urgent cash flow, a situation which many businesses owner face. The process of getting an invoice financing loan is comparatively easy and takes only a few days to get approval and funding.
So when you are ever in need of quick capital, then invoice financing loan is the best manufacturing business loan for you. Sometimes small business owners are not able to maintain the operational cost of the business, which can lead them to bankruptcy. In such a situation, you can easily opt for invoice finances to get out of this tight spot.
- Line of Credit
Generally, a line of credit is an option mostly utilized by entrepreneurs. Entrepreneurs usually use this for an emergency; however, manufacturing business owners can also go for such loan option when they need urgent finances.
One of the upsides to using a line of credit is that you can use it when required and interest is only charged on the amount used.
You should analyze your business situation and understand the loan policies before applying for any type of manufacturing loan. All these types of manufacturing loans are beneficial for a small business owner to maintain their day to day operations; however, opting for a loan, you can’t pay back can be a nightmare for you. Make sure to opt for loan options that are suitable for your business situation.