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Compare Singapore home loan versus SME loans

August 5, 2009 by property
Filed under Compare Singapore Home loans

Compare Singapore home loan versus comparing SME loans

Compare Singapore home loans and get a lowest cost of capital for your SME business

You can refinance for more cash using Home loan.

Small and Medium Enterprise are most starved of Cash

In almost every country on earth, it is the Small and medium enterprises that are most vulnerable. As you know, banks lend based on credit status and credit score.

About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg

We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.

Buying property is a serious affair, we do NOT advocate a Greed or fear based buying approach, we emphasize that you need to check your property home loan affordability. Check out the mortgage calculators.

Not Simply Cheap, but what Fits. We Research, You Save!

Tel: 6100 – 0608

SMS: 9782 – 8606

Email: loans@propertyBUYER.com.sg

Bigger Singapore companies get all the funding

And as companies grow bigger and more reputable, banks are basically putting money on a platter and serving it up to the companies. Banks are desperate to get into the act. In this case, it is the banks that are begging people to take their corporate loans, enterprise loans, bridging loans, overdraft facilities or standby credit lines.

Banks give money to people or groups of people that do not need the money.

SME Have Great ideas, but are bogged down with raising funds, raising funds kill the creative spirit of the SME.

Contrast this with SME which are aspiring entrepreneurs with bright ideas starving for capital. Raising cash alone is extinguishing their passion. Raising capital is not core to their competency. ]If we did not have angel investors in abundance in the USA, we would not have companies such as Apple, Yahoo and many others.

In risk averse Singapore, there are not that many angel investors and there are also not that much seed capital available. So Small Medium Enterprises (SME) have to try all means to obtain capital.

In Singapore, people are very conservative. Singaporeans like to be employees. Not many people understand the pressures faced by the SME bosses.

Is trying to obtain capital a good way to test the viability of a business idea?

If your business idea has some merits, investments will come and bankers will be willing to lend.

While there are some truths in the concept that people will invest if your business plan is good.But technology is transforming the business ideas and models in a big way. New businesses need new paradigm. Therefore some of the bankers may not be the ones who are best equipped to assess the business plan for new business ideas.

How should a Small Medium Enterprise (SME) raise capital?

Traditionally a SME boss can tap onto his family and friends network in order to raise capital to start a business. [spin]Other ways that are more traditional are pawnshops.|Or SME bosses can pawn their jewelry.

Have you ever thought of using your Private property to raise cash? Some SME bosses can refinance their private properties to obtain cash out in order to fund their businesses.|Can you raise cash through refinancing your property?

How to go about raising cash through Singapore Property?

If you own a private property which has substantial equity, you can try to obtain a cash out home loan. We can help you to Compare Singapore home loan to try to get the best fit from your home loans.

It works like this: -

If your property is worth        $800,000
And the outstanding loan is     $150,000
Your CPF usage is         $150,000

What this means is, you will be able to obtain $800,000 x 0.8 – $150,000 – $150,000 = $340,000

Will this equity home loan help the business? Will this cash out help businesses.

A business makes money if it is able to generate returns that are higher than the cost of capital and expenses. And capital is NOT FREE, there is a cost to it.

Home loan “Cash out” are the cheapest form of loans for the business. The rate at which you can borrow could be even cheaper than what the Federal reserve can borrow at. However it is also one of the harder to approve loans.|However the credit checks are very strict, many applications may fail if owner do not have a stable income.

In this day and age where the businesses are facing cost pressures, returns are slim. The difference between success and failure is the Cost of capital. For example, Supermarkets make returns of 2% to 6%. This is a very slim margin. Imagine if you are a Supermarket chain owner and you have to borrow at 7% to stock your supermarkets and you make returns of 5%. You will go out of business.

But if your cost of borrowing is 2.5% and your margins are 5%, then you have a chance to stay in business.

Can you get it approved? Most banks will still want to see a stable income. So if you start paying yourself a reasonable salary, after 2 years, banks will likely recognize this salary. Because cash out (Term loans or Equity loans) have stricter criteria.

Good, I am convinced, are there RISKS for EQUITY (CASH OUT) Home loans?

We are illustrating this as an option which you can consider. We are not advocating this as the only way.

There is huge risks using this option. For businesses incorporated as Private limited, the worst that can happen, your company folds up, but your personal assets are intact and protected from creditors.

If your business case is NOT Sound, the availability of this option may cause you to falsely believe that your business have a chance to succeed if there is capital. The availability of capital will just delay the demise of the company.

On top of that, you could LOSE YOUR Singapore HOME.

So you have to think twice.

So how do I know if my business case is sound?

How do I know my business structure is set up correctly?

We at Property Buyer – Singapore home loan mortgage consultants are pleased to help you take a look at your business case and discuss it over coffee if we have some spare time. You can call us even if you are not intending on getting a home loan or refinance a home loan to get a cash out.

We are helping SMEs as part of our community support program because we believe in giving so that we can get. There is no cost to you even if you want to talk with us but not do your Home Loan. We can give you a few tips on how to structure your company, how to fund and evaluate your business case and market segments. Since we are not charging you and we have nothing to sell you, if you want to buy us a coffee, we’ll gladly take it. 6100-0608 or 9782-8606 Singapore.

Should you pay yourself a salary if you are a SME boss?

How much to pay yourself for your own company?
If you are the boss of your own SME, how much should you pay yourself? You should try to pay yourself a salary. Banks encourage status quo. Banks do not encourage entrepreneurial people, they see them as risks.

If you can pay yourself a reasonable salary which can be verified over a 2 year period, banks will likely be more keen to lend you money for your home loan. If you have a HDB home, you can sell your HDB and raise cash (if there is equity) and use a 90% home loan for your private property. You can then use the extra cash for your business.

About Property Buyer Contact Property Buyer

www.PropertyBUYER.com.sg

Not Simply Cheap, but what Fits. We Research, You Save!

Tel: 6100 – 0608

SMS: 9782 – 8606

Email: loans@propertyBUYER.com.sg

About Property Buyer Contact Property Buyer
www.PropertyBuyer.com.sg
We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or Singapore Mortgage refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Not Simply Cheap, but what Fits. We Research, You Save!
TEL: +65 - 6100-0608
SMS: +65 - 9782-8606
Email: Loans@propertyBUYER.com.sg
Business Registration: 200618162C
All articles are the intellectual property of www.PropertyBuyer.com.sg. You are welcome to reproduce our articles provided that you include an active and working link back to http://www.PropertyBuyer.com.sg
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