This post is provided by Hannah Madison.

Small and medium-sized businesses are important to the economy of Singapore. Ninety percent of all local businesses are owned by them, and they generate roughly 42% of the GDP of the country. SMEs also provide a wealth of opportunities, especially given the current digital transformation.

When the number of SMEs increases, one of the biggest problems they come across is a lack of funds. They look for financing to have a competitive edge. The capital currently in place is insufficient to sustain expansion and meet objectives. For SMEs, a business bank loan is an effective option to generate funds.

A business loan from banks in Singapore helps SMEs, in particular, improve their cash flow, expanding their operations. Financing options abound in Singapore to assist companies in realising their organisational objectives.

Leading banks such as DBS provide SMEs with creative financing options that help them manage cash flow, gain new business prospects, meet certain purposes like buying machinery, and cope with sales volatility. This is in addition to government-assisted initiatives. Some SME business loans offered by banks are:

Business Loans

SMEs in Singapore continuously search for possibilities to develop by extending their operations and finding new markets to remain competitive with other businesses. They can grow their company if they have sufficient cash flow. Business loans are available from DBS, and applying for and obtaining one is a simple online process. The bank will carry out a credit evaluation to see if your business can get a loan.

A company can qualify for a business bank loan if it has a stable cash flow and steady income. Small enterprises that are not qualified for government-backed loans might receive assistance from private institutions. If your firm can fulfil the minimal conditions, you can apply for a working capital loan or business loan of up to SGD 500,000. The loan offers a customisable payback duration of one to five years, along with a low interest rate.

There are several advantages to using an online business funding application. They include:

  • An easy-to-use application that facilitates quick access to the loan application and essential details
  • Simple online loan application method
  • Avail an extra 18% savings on top of the 50 percent discount on processing charges starting in February 2024.
  • It helps save money by paying less interest.

 

Working capital loans

A business loan is available to SMEs with a maximum of 200 workers and a group income of not less than SGD100 million. Through partnerships with banks, the Government of Singapore provides SME borrowers with loans up to S$500,000 with durations ranging from one to five years for repayment.

To become eligible for a working capital loan, SMEs should be ACRA-registered businesses and limited liability partnerships in Singapore, wherein permanent residents or citizens of Singapore possess 30 percent of the equity held by SMEs.

Overdraft Services

Most private banks in Singapore also offer SMEs a credit line on an ongoing basis through an overdraft facility. They can use such funds for developing businesses or operating expenditures up to the agreed credit limit. Among the salient characteristics of DBS’s overdraft services are:

  • Simple and quick loan application facility
  • Easy access to the necessary information
  • Funds are available for instant use on your business account.
  • You can use only the required amount, for which you have to pay the interest.

Account Receivable Purchase

An accounts receivable is a trade that implies the capital principle in connection with a business’s accounts receivable. Assets that reflect outstanding bills that your clients or customers have not yet paid are known as accounts receivable.

The use of the latest technology to have the accounts receivable platforms offer you the specifics of business accounts receivable has led to an increase in the popularity of accounts-receivable purchase loans in recent years. Compared to other forms of company funding, accounts receivable financing is relatively easy for an SME.

Singaporean SMEs can satisfy their short-term capital demands with the help of these business bank loans.