Small Business

4 Things to Consider Before Borrowing For a Small Business

If you want to start a small business, you will need capital to begin. That may involve a lot of money that you don’t yet have. With that, you may be thinking of approaching a licensed money lender online to take out a business loan.

Since they do involve a huge amount of money, business loans can put a huge financial burden on you. To make sure the loan is worth it, consider these things first before taking out a small business loan.

Projected income

The first thing to look at is how much money your small business stands to make. Create projections of monthly income and compare this with the monthly repayment on the loan. If the projected income of the business barely covers the monthly repayments of the loan, it’s not worth it. During lean months, the business may not even earn enough to cover the loan repayment. In turn, you can find yourself in even more debt.

On the other hand, let’s say the business can earn more than the monthly repayment of the loan. With this, you can pay down the loan with the income from the business. Then, you get to keep whatever remains. If this is the case, a business loan is a good idea.


Another important question to ask is whether or not the business will be profitable. This is one big factor to consider. It will tell you whether your business idea is worth the time, effort, and money or not. A business that will not be profitable will not survive. Thus, taking out a loan for that kind of a small business is definitely a bad idea.

But if you can see that your small business will be profitable, then go ahead with the business loan. Your business will continue to earn for years to come even after you have fully repaid the loan.


Will your business still be operating after three years? How about after five years? Ten years? The best small businesses are those that last long. They may not turn into a large multinational corporation, but they continue to serve Singaporeans the best way they can.

Will your small business stay on for several years? If it can, go ahead with that business loan. It will be worth it.

Potential for expansion

If you’re like most business owners, one of your goals is to expand eventually. From one shop, you may want to open another branch in a different part of Singapore. After some years, you may want to expand into neighboring regions like Johor. Pretty soon, you may find yourself aspiring to be the next big multinational.

If expansion is in your plans, business loans are crucial to realize these goals. The loans will give you a quick source of capital, and the extra income you would gain can easily pay off the loans. After you have fully repaid your loans, you will continue to reap the profits of your not-so-small-anymore business.


Taking out a loan for a small business is usually a good idea, but not always. Look into the factors mentioned above to find out if a loan really is a good idea for your small business. Once you have decided, check out trusted Bedok money lenders or lenders in other areas of Singapore for your business loan needs.

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