You Need to Be Sure to Get the Right Loan That You Need for Your Business to Compete in Singapore
The enterprises do not help owners earn money, but also a contribution to the overall business development of a specific state. With Singapore’s growing economy, SME development is important, and the government is very much aware of this. In order to promote the Singapore SME loan, they offer a lot of schemes to small and medium-sized companies in Singapore that were launched by Enterprise Singapore, which is helpful to various SME departments, from everyday cashflow to money for equipment, based on their needs. Therefore, if you want more funds for your business, you can use the given schemes here.
The FS Bolt is only available to Singapore SMEs that offers cash access almost right away. The loan is a good fit for new SMEs that require a quick loan and are expected to pay it back before it incurs large charges of interest. The FS bolt is giving eligible borrowers access to a maximum of S$100,000 in a business day. The fast application, that does not feature financial requirements or operational history, takes out the burden of paperwork and allows them an additional time to spend on their business growth. In addition, FS bolt is not requiring charge or collateral if you repay early. A disadvantage of FS Bolt is they have a 5% service charge.
SME Micro Loan
This loan scheme is suitable for startups, and it is a scheme that businesses are allowed to apply for and receive a loan of S$100,000. The funds can be for daily cash flow and upgrading factory equipment. The maximum period allowed to repay the loan is four years, and an interest rate could be anywhere from 3.2% to 4.7% per year.
Invoice Financing Loan
Invoice financing loan allows companies that are waiting on customer payments to loan money against invoices using these payments. SMEs that have a large account receivable may opt for a short-term loan through invoice financing. A company can offer an invoice loan of up to S$1,000,000 that has competitive interest rates. Normally these interest rates range from 0.75 to 1.25% a month.
This type of loan can be given within 1 to 2 days after approval, which is the fastest option. There is an invoice financing product that accounts for the ageing history of receivables to provide an extended term of payment aside from their invoice. The interest can be pro-rated, and that means SMEs that are repaying their loan can save on interest costs for the remaining duration of the invoice. Lastly, there is no charge for application, unlike when you go to crowdfunding platforms that charge about S$1,000 a year.
SME Working Capital Loan
The working capital loan through an SME can have a loan that is S$300,000 as needed. The interest rate can depend on what the financial institution is risking with what they are involved in and the repayment period of four years. Companies based in Singapore and should be operating in a city-state are eligible or if they have an annual group sale of a maximum of S$100 million. They should also have a maximum of 200 employees only. In addition, they should have a local shareholding of at least 30%.
The lenders of crowdfunding offer similar durations of loans, interest rates, and business requirements. Therefore, depending on the particular SME characteristics, the platform might be sensible compared to others.
DBS Property Loan
A DBS Business Property Loan is known as the best commercial property loan business owners can avail of. Property loans let borrowers have the chance to receive loans according to the value of their property. SMEs might utilize their commercial property as a way to obtain a loan in order to meet their funding needs. DBS is allowing businesses to get financing of up to 120% based on their property valuation. This is a lot higher than others, which lets you borrow financing for up to 80%. In addition, online approvals and application for DBS Business Property Loan are quicker compared to other banks, and the process takes less than 1 day.
The evaluation of DBS Local Enterprise Finance Scheme, which is done by Enterprise Singapore, allows businesses to borrow financing of up to S$15 million over a course of 4 to 7 years. Therefore, loans are normally available for SMEs that have a relatively sizable scale and history of operation. Normally, banks offer an interest rate that is lower than P2P but has a more selective application process. In addition, DBS does not have a success fee, unlike other similar platforms. Payments are done on a fixed monthly schedule.
In order to qualify for this loan, SMEs should be formed in Singapore and a local shareholding of at least 30%. In addition, the company should have a yearly sale of S$100 million maximum, or they do not have more than 200 employees. Fulfilling the requirements of this financing program backed by the government is not guaranteeing application acceptance. Normally, traditional banks such as DBS is more selective compared to P2P and crowdfunding platforms.
Application Procedure for the SME Loan
Any loan you choose will require certain documents that the financial institution will need from you. You should have a business profile from the Accounting and Regulatory (ACRA). The verified statements and bank resolutions that say the company’s financial situation. The income tax assessment is done by the owner and other members of the board of directors.
The ongoing trade financing credit line to purchase materials from suppliers is what this loan is about. The Letters of Credit (LC) is issues to overseas suppliers. The trust receipts (TR) credit terms are between 90 to 120 days.
These are the SME loans you can consider applying for in Singapore to help you with business startups and operations that not all countries are able to offer.