3 Questions to Ask When Starting up a Business in Singapore
Starting a business in Singapore is one of the best decisions that one can make. However, the whole idea of starting your own business can be challenging and stressful though at the same time rewarding. It might be challenging in that the necessary capital that you require may not be available to you at the time you need to start your business.
On the other hand, the profits and achievements amidst your losses and failures that you would get may be one of the best things that you will get as a reward. In most cases, you will realize that the success of your business will greatly depend on your hard work.
Below are some of the questions many startups often ask when it comes to starting a business in Singapore:
- What type of company should I incorporate?
There are 4 main types of companies to consider when starting a business in Singapore, namely a sole proprietor, partnership, private limited company and limited liability partnership. A sole proprietor and partnership is similar in the sense that the business and the owner is of the same entity, meaning to say there are risks of debts and bankruptcy aka unlimited liability. However, the good thing is that both of these set ups do not require the owner to engage an auditor and corporate secretary.
Most business owners go for a private limited company as the advantages are that liability is limited to amount remaining unpaid on shares held and shareholders are given specific shareholding allocation equivalent to the way profits are split. Even though a corporate secretary is required and proper corporate registers must be maintained, many businesses have found it easier to have someone else manage their accounts for them.
- Do I need to set up a corporate account?
Many sole proprietors do not set up a corporate account and manage their business transactions via their personal accounts as they feel that it is easier. However, it would be better for businesses to keep their personal and business transactions apart. This will be easier for businesses looking at acquiring more capital in future as well as banks do not accept personal bank statements during the course of application. Initial deposits for corporate account set up can go as low as $3000 from banks such as OCBC with only an average balance of $5000 to maintain monthly.
- Can start-ups qualify for business loans?
Business loans require a minimal establishment of 2 years to be qualified and start-ups are not able to obtain one as they do not have an established record. Nevertheless, there are start-up and entrepreneur loans available for small medium enterprises established for a period of 6 months and above. The approval amount is typically smaller as compared to a business loan as well, ranging from 24K to 100K. This can be tapped on to cover main startup expenses such as rental, utility and hiring on manpower.
These basic questions are just but a few to understand when you are starting a business in Singapore but at least you plan and prepare right from the very start. Speak to Capitalize today to know whether it is possible for your startup to obtain a startup loan. With that extra capital on hand, you will be able to speed up your plans to gain that edge over your competitors.
Capitalize is a corporate loans specialist firm that helps Small Medium Enterprises (SMEs) and individuals to seek, source and obtain capital from across our established network of up to 30 banks, financial institutions, funding houses and alternative platforms. We are always committed to provide our clients with the most suitable loans according to their needs, from the lowest interest rates possible and at the quantum they require.