3 Reasons Why You Should Take a Business Loan Before Chinese New Year

In Singapore, many Chinese Singaporeans adhere to Chinese New Year (CNY) superstitions such as “Wearing red is auspicious while black is a big no-no”, “Don’t wash your hair on the first day of CNY as it is seen as washing your fortune away”, just to name a few. One of the superstitions that most business owners may still believe in is that taking loans or owing debts over CNY is pantang (Malay word for “taboo” due to superstitions) as they may be plagued by financial difficulties in the new year.

However, there is another school of thought which believes personal and business debts are separate matters. In fact, taking debt before CNY to take advantage of seasonal demand or to give staff red packets may bring positive outcomes for the business in the long term. Many Chinese superstitions have also fallen out of practice and no longer hold sway due to practicality and changing times such as the belief that cutting nails at night will bring bad luck. Here are 3 reasons why you should consider taking a business loan before CNY!

1. To take advantage of seasonal demand

If you are running a seasonal business, you will usually experience a spike in customer demand during festivities such as CNY. This is especially prevalent for businesses in the food and beverages (F&B) and retail industry. However, many businesses fail to capture this opportunity as they are insufficiently prepared for the seasonal rush. Tapping on a business term loan before the peak will allow you to stock up on inventory or hire short-term employees to better manage your demand during the festive period. It will also help you keep your prices competitive as you will not have to buy resources at premium rates during the peak period, which will help to maintain your profit margin.

2. Give CNY bonuses to employees in the form of Angbaos (Chinese red packets)

What better way is there to thank your employees for their contributions than to give them a bonus during the festive season? If you are awaiting incoming payments from your clients before CNY but would like to give a bonus to your employees, you can consider applying for invoice financing to free up cash that you have already earned but have not received from your clients. It is becoming increasingly popular for SMEs in Singapore to give angbao bonuses to their employees as a gesture of gratitude and appreciation. This is also a good way for you to raise your employees’ morale and motivate them to continue working hard for the next year.

3. Give corporate gifts to your valued clients

It is a common practice in Singapore to give corporate gifts to valued clients during festive periods. Corporate gifts are an opportunity to express your appreciation to your clients and to reinforce your close business relationships so as to potentially increase future business activities. Once again, invoice financing may be a viable solution to free up cash to purchase corporate gifts for your clients during CNY!


Ultimately, this is the perfect opportunity to evaluate if it will be beneficial for your business to consider getting a business loan before the peak CNY period. If you are curious about the business financing options that are available, you can find out more on “Peer-to-Peer Loans and Why You Should Consider Them”.

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