As part of our commitment to help SMEs, ETHOZ Capital is a participating financial institution for the Local Enterprise Finance Scheme (LEFS) administered by SPRING Singapore.
The purpose behind this SPRING-initiated project is to assist and encourage the growth of locally-owned SMEs.
As a participating financial institution, we can authorise SME loans or Business Loan of up to $15 million, which can be made available for factory or equipment upgrading, process automation and for purchase of new factory or business premises, finance lease (only applicable to JTC Corporation or HDB properties).
There are a range of financing schemes under LEFS that SMEs can tap onto for different business needs.
The SME Micro Loan (formerly known as Micro Loan Program) is targeted at small businesses with 10 or less employees that requires working capital to fund operations, or for automation and upgrading of factory and equipment. This SPRING-initiated project designed to support the growth of smaller businesses with a maximum loan amount of up to $100,000. In addition, the SME Micro Loan has been further enhanced to make loans more accessible to young companies less than three years old.
This is a popular loan option among the small-medium enterprises (SME) as it helps to enhance their cash flow with easy access to funding. Additionally the SME Micro Loan is unsecured, which will not require companies to use their assets or resources as collateral. Apart from this, it also allows them to plan their finances effectively with a fixed monthly repayment schedule.
Launched in June 2016, the SME Working Capital Loan is a new scheme aimed at larger SMEs with 200 or less employees to provide funding capital for business operations. Similar to the SME Micro Loan, eligible companies are able to apply for a higher maximum loan amount of up to $300,000.
The SME Equipment Loan (formerly known as LEFS Equipment Loan) can be utilized by SMEs with 200 or less employees to secure funding up to $15m for equipment purchase or upgrading.
Similar to the SME Equipment Loan, the SME Factory Loan (formerly known as LEFS Factory Loan) can be tapped by SMEs with 200 or less employees to secure loan amounts of up to $15m for the purchase of JTC Corporation or Housing & Development Board business properties.
Company D is a small-medium enterprise (SME) that does central food production for canteen operators. Things were going smoothly at the start, but as business continues to grow in the following 2 years, they find it very difficult to cope with the increased customer demand as their equipment capacities are fully utilised. In order to resolve this, they will require $100,000 to fund the upgrade of their equipment.
Unsure of the loan option, the owners of Company D approached ETHOZ Capital for financing solution. Being a 2 years old company with only five employees, ETHOZ recommended the SME Micro Loan to Company D for consideration to fund the upgrade of their machinery.
Upon agreement, ETHOZ waste little time in securing the funding for Company D. The whole process is quick and hassle-free. Thus, Company D is able to proceed with their machinery upgrade almost immediately – increasing the company’s food processing output and therefore sales.
ETHOZ has offered Company D the following terms:
Interest Rate : 5.5% effective rate
Monthly Repayment : $3,020 x 36 months
In this example, Company D pays $3,020 per month through taking up a SME Micro Loan. It does not have to put up any collateral to secure this loan while making it possible to upgrade their machinery to increase productivity.
* Disclaimer: Example above is merely shown for illustration purpose to better allow readers to understand the uses of each financing solution. Figures and interest rates listed above are not representative; it may differ based on each company’s requirements and management’s approval. Additional terms and conditions may also apply based on the credit assessment and evaluation conducted during application. ETHOZ Capital Ltd and its employees make no representation or warranty, whether expressed or implied, and accept no responsibility for the completeness or accuracy of the computation.
Not sure how this works for your company? Talk to our Relationship Managers at 6654 7799 or email us to find out more!