Build Credit and Get Funded: Tips for Businesses in Singapore

Written by
Marissa Saini
Last Modified on
December 19, 2023

As a new business owner, you’ll need all the capital you can get. The same applies to established companies looking to scale their business in size and reach. But what do you do when you don’t have the means to finance your business or could use some financial backing? 

Business loans and credit lines are the answer. Such funding avenues help founders gain access to a fixed amount of capital for short term-operating expenses, cash flow during slow seasons, and funds for expansion. 

While you can cut straight to the chase and apply for a loan immediately, it would be wise to work on building business credit before jumping the gun. 

What is a credit score and how can it benefit your business? 

A credit score is a numerical value used by lenders to indicate how likely an individual or company can repay their loans on time. This figure is based on previous payment history on your loan accounts. If you have no existing or active loans, this means you haven’t established your credit score yet. 

The concept is relatively simple: if you pay your debts on time, your score improves. On the other hand, failure to do so will cause your figures to drop. 

Building your company’s business credit can open an array of opportunities such as: 

  • Qualifying for business loans and credit lines with ease 
  • Qualifying for government contracts, grants and programmes 
  • Obtaining lower rates for business insurance 
  • Receive funds from investors 
  • Secure longer terms from suppliers and vendors 

Regardless of whether you are ready to scale your business or are only in the early stages, establishing business credit will be beneficial in the long run. 

Businesses in Singapore

Build business credit in 5 simple ways 

  • Incorporate your business 
  • Pay your bills on time 
  • Limit your business loan application inquiries
  • Get a business credit card 
  • Monitor your credit closely 

1. Incorporate your business

Registering your Singapore-based business isn’t just about separating your business and personal finances; it’s also about distinguishing your credit scores as well. For those that haven’t taken this step, you might still be using your personal bank account for all things finance. While your personal credit score might be improving, this doesn’t translate into a business credit score. 

Minor slips like missed payments may affect your personal assets as well. On top of that, incorporated businesses are seen as more credible in the eyes of financial institutions, investors, and potential shareholders.

2. Pay your bills on time

As a business owner, your ability to pay your dues on time plays a massive role in building your credit score. With good payment history comes better credit scores, which eventually leaves you 

with better chances at receiving funding and qualifying for credit lines or loans. 

Take note that credit scores give lenders a rough gauge as to how likely you are to pay back your loans. Missed or late payments will affect your rating gravely. If your funds allow for it, consider making loan payments earlier than your payment due date. 

3. Limit your business loan application inquiries

Did you know that even the number of loan enquiries also affect your business credit? Every time you take on a business loan application, an enquiry is automatically placed on your file. When you make too many enquiries, it increases your credit exposure and notifies lenders that you’re trying to take on more debt. 

With multiple enquiries in such a short amount of time, it creates the impression that you are desperate for funds, which will have detrimental effects on your credit score. As a business owner, the last thing you want to do is to indicate possible financial distress among loan providers. Try keeping your applications to a minimum to avoid hiccups along the way. 

💡 Tip: Did you know that Aspire has one of the most flexible credit lines in the region for SME founders? Learn more about the Aspire Credit Line here.
startup business loans

4. Get a business credit card

If you haven’t been using a corporate credit card to pay off business expenses, then it’s time to get started. Instead of using a debit card to settle bills, monthly wages, and recurring monthly payments, paying with a business credit card is a simple way to build business credit. This is especially useful for new entrepreneurs without any credit history to begin with. 

Ensure that you make your payments on time so you can build your credit history as you spend. If you’re looking for something out of the ordinary, tap into virtual corporate cards for teams. 

💡 Tip: On top of unlimited virtual cards, enjoy low transparent fees and competitive foreign exchange rates when you sign up for the Aspire Corporate Card

5. Monitor your credit closely

As your business credit continues to improve, go the extra mile by paying close attention to your scores. Monitoring helps founders track their progress and financial data, spot any potential errors, and even detect potential fraud in its early stages. This gives business owners the added layer of protection they need. 

By regularly monitoring your financial health and ensuring that the information is accurate, it gives founders a better understanding of your current credit position.  

What’s next? 

Take your startup to the next level and get started with the Aspire Line of Credit. With flexible loan terms and a smooth online application process, business owners can gain access to working capital as early as 48 hours. 

Pay only for what you use with transparent pricing and interest rates as low as 1% per month. Ready to get funded? 

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About the author
Marissa Saini
is a seasoned writer and an avid trendspotter across business finance, personal finance, travel and lifestyle industries. With writing history at SingSaver, INK, and ohmyhome, Marissa leverages her broad range of experiences to simplify finance and make readers financially savvy.
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