Whether you are a Small and Medium Business (SME) entrepreneur or Multinational Company owner (MNC), there is always a way to fund your business. It is whether to increase your capital for business growth, invest in new business ventures, acquire new properties or even making a business loan.
But there are some types of business loan out there and although you can get advice from your preferred bank which is your new and popular product, how will you know if that is really the best choice for you and your business?
Therefore, we have collected four types of loans that can help your business:
As a business owner, you need sufficient capital to keep your business running and of course, to expand it from time to time. Most banks offer longer term loans that are larger than the total with different periods. This type of loan is often repayable on a monthly basis within a certain repayment period.
Traditionally, there are two types of term loans; collateral and without collateral. It works the same way in terms of repayment plan and loan term, but collateral offers higher loan volume compare to which without collateral.
If you are looking for a large amount of business loans, try BizPower SME Business Loan by RHB Bank. It offers up to RM2 million total loans with up to five years – a good choice to start your business growth – provided your SME business is operating for at least two years. Otherwise, you can choose BizPower P.I.N.T.A.S by RHB Bank, which offers a loan amount of up to RM500,000 without collateral.
If you want to invest in real estate or finance your business property, maybe a business property loan like BizPower SME Property Loan by RHB Bank is better suited for your business needs
Short Term Loan for Working Capital
Short-term loans or working capital loans are generally loans that help increase your cash flow to finance your day-to-day business operations such as staff salaries, daily debt, utilities, etc.
This really helps businesses with seasonal sales cycles such as manufacturing or retail companies that can only achieve their sales targets depending on the season or businesses experiencing cash flow problems due to customer suspension payments. There are several types of loans under this category, such as:
Overdraft – This is the type of credit or loan facility attached to your current business account that allows you to spend more than your credit limit to help fund your daily operating needs. The amount of overdraft will be subject to daily interest charges, so be sure to repay it as soon as possible! Some business loans like BizPower SME Business Loan also offer Overdraft facilities when you need additional money to run your business.
Revolving credits – This flexible credit facility allows you to withdraw funds for the required time. Usually no fixed payment amount, you can choose to pay the full loan amount at the end of the loan period or to roll up the loan amount by renewing your loan term and paying only the interest due.
Trade Financing Facility
If your business involves domestic and international trade (exports and imports), you may find trade financing useful to help support your transactions.
One of the most common trade financing facilities is the Letter of Credit (LOC), which acts as a written commitment given by the bank as a means of payment. Others include Shipping Guarantee (SG), Bank Guarantee (BG), Trust Receipt (TR), and Banker’s Acceptance (BA). There are several trade financing facilities offered by banks in Malaysia, including RHB Financial Supply Chain Portfolio Guarantee (FSCPG) by RHB Bank.
As an entrepreneur, you have many funding alternatives open to you. What you need to do is more proactive in your research and intelligently manage it. For example, if your business is new or in the beginning, you can choose a personal loan, credit card cash advance but remember your credit card interest rates, loan from a friend or family member, fundraising or selling assets.
Finally, no matter what option you choose, be sure to learn all you can about the fees and charges involved to avoid any financial problems in the future. Make research and make sure you make the best choice before applying for your business loan.