The lockdowns may have affected foot traffic for retail stores but their online counterparts have seen a corresponding boom in business. A collateral-free business loan is one of the many unsecured business loans that you can use to piggyback on this lucrative trend.

Traditional brick-and-mortar stores have been using fast business loans to tap into this market but new online-only businesses and hybrids are doing so as well. Licensed money lenders have reported a sharp increase in applications for new business loans as more people look to use a start up business loan in Singapore.

Create a business plan

A business plan is exactly that – a plan to run your business. It includes essential variables such as:

• A clear outline of the products and/or services the business deals in
• Why the owner(s) and operator(s) are qualified to run the business
• The target audience
• The market size for the products and/or services offered
• The growth potential of that market
• The current and/or expected running costs and expenses
• The setup costs (for new business loans)

Practical Covid considerations

Many businesses, even well-known ones, have been devastated during the coronavirus pandemic. That is especially likely to happen to stores that have been associated with active Covid clusters.

Any feasible business plan today must also incorporate expectations of, and contingencies for further lockdowns. No lender will be comfortable giving you a collateral-free business loan without a clear, cogent and practical pathway to revenue through online sales.

Apart from the outline for the loan, you will have to plan exactly how you will fight against infection at your business. This applies to online-only businesses, too, because they still have to send out their products via couriers or the post office, and handle returns as well.

You can use fast business loans to stock up on essential supplies such as:

• Hand sanitiser
• Masks, gloves, and other PPE (personal protection equipment)
• Cleaning supplies (for wiping down regularly)

These costs can further skyrocket for online businesses that handle a large number of deliveries because of the increased contact between couriers and staff members. You will also have to consider whether social distancing guidelines will affect how many staff can be in your office at one time.

• Will they be required to work in shifts?
• What resources (internet connection, computer screen, furniture, etc.) will they need to work from home?

These factors impact sales turnaround times and, thus, revenue. A start up business loan in Singapore may be your best option if you are setting up a new operation, while there are several unsecured business loans for established businesses.

Getting Funding

There are two chief ways that you can get funding for your business: traditional lenders such as the big banks, and private licensed moneylenders. There are advantages and disadvantages to each option.

Major Lenders

In light of the economic downturn from the pandemic, the Singapore government has created two special business loans that are available only through major lenders. They are the SME Working Capital Loan and the Temporary Bridging Loan.

These unsecured business loans are backed by the government for 90% of their value. It has made it significantly easier for smaller businesses to get approval. Applicants may get funding of as much as $5 million but the selection process is extremely competitive. You will have to have a solid business plan to succeed.

Private Moneylenders in Singapore

If you want fast business loans, you may have better luck with a private moneylender. They have stringent requirements for identity proof but are less restrictive with their financial criteria.

If you have bad credit, have previously been declared bankrupt, or have an irregular work history, a private lender is more likely to approve your application for new business loans. However, the loan principal is usually considerably less – most lenders will loan no more than $30,000 to a new client.

Alternative Business Models

It is unlikely that the traditional store will become redundant anytime soon. However, an online-only store or the option of online shopping is virtually essential if you want to survive in this business environment.

Online shopping sites such as Lazada, Shopee, and Amazon are helping local businesses sell their wares to customers around the world. A start up business loan in Singapore can help you get a foothold in the market against major companies that have been operating for years.

Who knows, with the help of a collateral-free business loan for digital marketing, you may become the next Amazon yourself.