Hire Purchase or Leasing of Equipment in Singapore: The Pros & Cons You Should Know

Many companies in Singapore need access to expensive equipment in order for their businesses operations to run smoothly. However, purchasing equipment in Singapore can be a daunting, not to mention pricey affair. Other options include leasing the equipment you need or acquiring it through hire purchase-but what does that entail?

If you’re looking for a long-term and cost-effective solution for your business needs, leasing and hire purchase are some great alternatives to consider! While both provide you with long-term usage of essential equipment for your business, they have very different implications on your finances and needs. If you’re unsure which would work better for you, fret not! We’ve put together this comprehensive guide exploring what these options entail and the benefits that come with them.

 

What is Leasing & Hire Purchase?

Leasing is essentially a method of renting an asset over a specified period of time for a fee, just to help your business advance to the next level. At the end of the lease agreement, you will have to return the equipment back to the rental company in its original condition.

On the other hand, hire purchase allows the hirer to acquire and utilize highly-priced equipment on their terms. Usually, an initial down payment is required followed by monthly payments for the fixed period. After all repayment terms are fulfilled at the end of the rental period, the hirer has the option to own the asset.

 

 

Pros of Leasing

 

 

1. Greater freedom and flexibility 

Leasing an asset is especially useful when you’re not 100% sure that you will need it in the long-run. Moreover, leasing eliminates the risk of asset obsolescence, as you won’t have to worry about the equipment’s disposal at the end of its useful life. You have the flexibility to decide when you want to return it to the rental company (preferably when the equipment becomes unnecessary to your business operations), passing on the burden of obsolescence onto the lessor, freeing yourself to lease new, higher-end equipment.

 

 

2. Lower monthly payments with low or no downpayment

Equipment leasing is an efficient way for new, growing businesses to get hold of the tools they need. If you are the owner of a small business enterprise or an entrepreneur, you may not have the capital to purchase equipment. In that case, leasing is definitely the more cost-effective option as it allows you to acquire equipment with minimal initial expenditures.

We have professional relationship managers at ETHOZ that will analyse your specific equipment needs and budget to propose a customised equipment leasing programme which will allow you to make affordable monthly payments over time. This way, you get to save your working capital for business expenses and expansion, which would otherwise be used up making cash payments for your equipment.

 

 

3. Easier to upgrade your equipment

Leasing makes it easier to upgrade your equipment depending on the needs of your business and how you structure your lease. For example, if you need a piece of certain equipment at the moment, but know that a newer and better model will be released in 1 year, you may sign a leasing agreement for a one-year term. That way, you’ll be able to trade in your old model and upgrade it to the new one at the end of your lease.

 

 

Pros of Hire Purchase

 

1. Customised repayment amounts

Be it small-scale local enterprises, businesses, or entrepreneurs, you will be able to operate your asset from the onset and generate revenue while paying for the equipment on a regular instalment basis over a fixed repayment term, maximizing working capital. At ETHOZ, we offer a flexible frequency of instalment payment terms to make budgeting easier for you. The payment terms may be monthly, quarterly, half-yearly, or annually, as per the terms of the agreement. Each rental payment is considered as a charge for hiring the asset.

 

2. Ownership of the asset

Hire purchase ultimately differs from equipment leasing with respect to the choice of ultimate ownership of the asset. At ETHOZ, we promise a hassle-free customer experience in helping you achieve that if you wish!

With simple and efficient application procedures and fast approvals, equipment bought on hire purchase will be accessible for use almost instantaneously without payment of the entire price. This makes it the most suitable for the purchase of expensive assets.

Moreover, before the completion of the repayment term, the hirer has the flexibility to terminate the agreement if they do not wish to acquire its ownership rights.

 

Hire Purchase or Leasing of Equipment in Singapore

If you’re looking for highly-priced equipment to boost the productivity of your business operations, it may be confusing — especially with so many things to look out for when it comes to either obtaining the asset through hire purchase or leasing. If you’re still having trouble deciding which would best meet your needs, simply give our team at ETHOZ a call at 6654 7799! You can also drop us an email at contactus@ethozgroup.com today!

 

 

3 Ways a Term Loan Secured with Property can Help Your Business

Starting your own business has become a dream that many Singaporeans are able to call a reality. But with new business ventures come both risk and reward. That’s why it is not uncommon for small businesses or startups in Singapore to require some form of financing, in the form of term loans. If you’re looking to learn more about what term loans are and how they can benefit your business, read our simple introductory guide to secured term loans in Singapore.

 

 

What is a term loan and what does it mean to have it secured with a property?

In layman’s terms, a term loan is a deal between a lender and a borrower. The lender provides a sum of cash up front and receives that cash back in the form of repayments, with interest, over a fixed period of time. Term loans are especially useful for businesses to purchase fixed assets such as equipment for production processes, as these allow for the generation of profit while the loan is being repaid.

A term loan secured with property, in particular, refers to the personal asset (your property) / company fix asset (property) being used as loan collateral. The lender will have legal mortgage over your property until the loan you have taken is repaid. This means, if you fail to make your repayment, the lender has the legal right to seize and sell your property in order to fulfil your repayment.

 

 

What is the difference between secured and unsecured term loans?

 

Advantages of secured loans:

 

1. Lower risk for the lender

One of the benefits of a secured term loan is that it presents a lower risk for the lender because the asset ensures repayment in the event of a default. A default refers to a failure to meet the legal obligations or conditions of a loan.

 

2. Lower interest rates for the borrower

Another benefit of a secured term loan is a complement to the low risk the lender faces. Lenders are thus more willing to lower their interest rate.  Lenders will also be more willing to extend a longer repayment period resulting in lower monthly instalment which is beneficial in helping your business manage funds in the present day.

 

3. Larger amounts can be borrowed

More money can be borrowed together with the flexibility of having longer periods for repayment. This is also partially due to the lower risk the lender faces, as valuable personal assets such as property are used as collateral for the business loan.

 

 

Advantages of unsecured loans:

 

1. Personal / Company assets need not be used as collateral

Unsecured loans are issued on the basis of the borrower’s capability to repay the loan without pledging a valuable asset such as your property as collateral.

 

2. A more hassle-free process

The application process for an unsecured loan usually goes much more quickly than a secured loan, as long as you or your business reflects a high credit score. You will be required to provide information about your savings, income, employment, or credit history.

 

 

How does a term loan secured with property help your business?

 

1. Increase liquidity

Some businesses in Singapore experience low liquidity, being short on cash and unable to pay off short-term debts such as taxes or payment to suppliers. Term loans secured with a property are particularly helpful for businesses in tight cash situations with valuable properties at their disposal. If you do not wish to sell and downgrade your property for cash, a term loan secured with property may be the solution as it allows you to get money out of your house without having to lose it.

The loan amount is established by the value of your property, which will be determined by an appraiser from the lending institution. If the value of your property increases over time, you may be able to request for a higher term loan, using the equity of your property as collateral.

 

2. Affordable repayment

The loaning institution will feel a lot more secure knowing that you won’t be able to just pack up your property and hit the road. With something they can foreclose on, term loans secured with a property are thus considered low-risk. This means that businesses will be able to take bigger loans with lower interest rates! With the capacity to take big loans without worrying too much about high-interest repayment terms, you will be able to focus on your business operations with a peace of mind.

 

 

Reliable term loans in Singapore

As with most businesses, navigating financial challenges is not easy and a lot goes into working towards and achieving one’s business goals. However, in some cases, the solution may not be straightforward. ETHOZ Capital provides businesses with easy access to additional funds from working capital loans to property mortgage loans at competitive interest rates, so that you may fully focus on growing your business.

If you require assistance, our experienced Relationship Managers can help you out with this. Simply give our team at ETHOZ a call at 66547799 or drop us an email at contactus@ethozgroup.comtoday!

 

 

The Best Private Hire Cars to Use in Singapore

Becoming a private hire driver is an increasingly popular profession in Singapore. Whether it’s to enjoy the flexibility it gives to your personal schedule, to earn a decent take-home salary, or to become your own boss, the profession is undoubtedly attractive to many.

Of course, you’d need to have a car for this purpose. If you don’t already have one, private hire car rental is the next best option for you — especially if this is just a temporary job to tide you over or if the complex car ownership process is just something you’re not ready for! In this article, we round up our best tips for choosing the best private hire car rental in Singapore!


1. Consider Your Customers’ Needs

As a private hire driver, ensuring the safety of your passengers is a responsibility that’ll fall on your shoulders. Taking extra precautions to ensure no one’s safety is compromised is just as important as having a clean and comfortable car for your passengers! Having added safety features on stand-by can give you peace of mind for safe travels ahead.

The Toyota Corolla Altis — one of the available models in our car fleet — can accommodate up to 4 passengers and comes with brake assist functions such as the anti-lock braking system (ABS) and electronic brake distribution (EBD). These functions can help to minimize the risk of sudden jerks, keeping you and your rider free from unwanted consequences.

Should you require additional space, rear seats can be folded to accommodate customers who might need extra space to put their groceries and bags!

 

2. Commuting in Comfort

Personal comfort is an investment worth making, especially when you spend most of your time chauffeuring people around from one place to another. Having a little more legroom in the car can make your journeys much smoother and keeps your body from aches and fatigue at the end of the day!

If you spend most of your day driving in a car, you might be prone to getting backaches from being seated for long periods of time. As compared to its’ predecessor, the Mazda 3 comes with improved interior features for more lateral support.

The cushion of the driver’s seat is much bigger with lower cushions long enough to accommodate taller drivers as well. Better yet, the back of the front seat has been redesigned to support you with a more natural sitting position when you drive. At $50/day, you can enjoy a cozy driving experience while protecting your back as you drive throughout the day!

There’s also more room for your passengers. Passenger seats and cargo capacities are larger, which means they need not worry about getting stuffy in the car if they carry along excess baggage!

3. Consider Your Intended Driving Duration


If you intend to drive very frequently over long hours, it can be worth going for a more fuel-efficient option to save you some bucks along the way. Though the differences may seem minor at first, just factor in all the hours you spend driving, and you’ll see a huge difference in your petrol bills at the end of the day!

Slightly more compact in size than the Mazda 3, The Mazda 2 — one of our available models in our car rental fleet — is also the most economical option that costs just $45/day.

Designed with a SKYACTIV® engine, the Mazda 2 is fuel-efficient and kinder to the environment. It comes with decent body control as well, making the driving experience perfect for long-distance cruising.

If you get caught up in traffic, there’s also an “I-Stop” function that can automatically stop the car’s engine when it is not in use and resumes it thereafter when it is time to drive. This way, you save on both fuel and money along the way too!


Renting vs Buying a Car in Singapore for Private Hire Drivers

As mentioned previously, buying a car may not be a suitable option for those seeking this profession as a short-term gig. The car ownership process in Singapore is very tedious, and also comes with hefty price tags attached to the Certificate of Entitlement (CoE).

Furthermore, the true cost of owning a car doesn’t end there! It includes maintenance, insurance, repairs and more. Hence, renting a car in Singapore is most often the best option for private hire drivers.


Renting a Private Hire Car in Singapore

With these tips in mind for choosing a private hire car, now it’s time to actually find a provider! Our private car rental service at ETHOZ boasts years of experience in the automotive industry and we are equipped to provide you with attractive rental packages that have fixed rental rates and refundable deposits.

From as little as $45 a day, our cars feature unlimited mileage and even regular servicing included at our professional car workshops to ensure that your rented car is in perfect condition not only for your safety as a driver but also for your passengers’ comfort.

At ETHOZ, our rental packages are inclusive of motor insurance, maintenance and road tax. In addition, you get to earn an incentive by signing a 6-month rental contract! Find out more about our private hire car rental service or simply reach out to a member of our team at contactus@ethozgroup.com to explore our options available to you. If you’ve enjoyed reading this article, our blog offers more tips and articles that can help you with a variety of topics such as automotive and rental solutions, as well as financing for equipment leasing!

Things to Consider When Looking for Cheap Car Rental in Singapore

It comes as no surprise that owning a car in Singapore is a pretty pricey affair. That’s why tons of Singaporeans content themselves with the extensive public transport network which has become an integral part of life here. But between owning a car and jostling through crowds to get from one location to another, there’s another affordable transport option in Singapore–car rental!

There are many car rental companies in Singapore offering car rental services for various needs. If this is your first time renting a car, there are a few things you should definitely look out for. Keep reading to find this comprehensive guide we’ve put together on all you need to know about finding cheap car rental services in Singapore!

 

Basic Requirements for Car Rental in Singapore

Though the legal driving age for Singaporeans is 18, you won’t necessarily be able to rent a car to get around in till you’re 21, but with a higher excess for those with driving experience of under 2 years, so check out these basic requirements if this is your first time considering car rental in Singapore!

Minimum Driving Age: Most car rental companies have a minimum driving age of 21-23 years old and NRIC and Driver’s License has to be produced for the car rental.

Expats: For Expatriates, passport, employment pass and valid International Driver’s Permit (IDL) must be produced. In the absence of an IDL, the hirer can produce their own country’s driver license which has to be translated into English.

 

Figure Out Your Car Rental Needs

Short Term Car Rental

If you’re looking for a car for a fun little weekend getaway or if you simply feel like spending a few days cruising around to beat the crowds during holidays, a short-term car rental will be the best option for you.

Also, the general rule of thumb is that the shorter the rental duration, the higher the rental costs per day. So taking the time to assess how long you’re going to rent a car can really make a difference to the final expenditure. If you are going to rent a car for more than 2 weeks, check the difference between the daily and monthly rental so you can do your math and figure out which is better for you.

 

Long-Term Car Rental

For those who do not want to bear the burden of the costs that come with owning a car, but still want to drive frequently, long term car rental options may be more suitable for you. Usually, long term car rental packages come in the form of monthly or yearly contracts depending on the user. If you’re looking for a more cost-effective option, one-year and longer contracts are usually cheaper than monthly contracts, if you break down the costs on a daily basis.

If you’re going to be driving the car frequently over a significant period of time, you should definitely opt for a long-term car rental package. You may also want to pick a specific model that will best suit your needs, given your frequent use. At ETHOZ, we offer a wide variety of make and models to suit your needs or preferences. If you are able to commit a longer term, i.e., 2 years or more, you will have the option of leasing a brand-new vehicle.

 

When is the Best Time to Get Cheap Car Rental?

As the saying goes, timing is everything–and that holds true even for car rentals! If you’re anticipating the need to rent a car during peak periods such as Chinese New Year, Hari Raya and so on, you may want to approach your car rental service provider way before this festive period to avoid peak period surcharges. The peak period surcharge will apply as long as your dates fall within the peak period but you may be eligible for early bird discounts if you make a booking early! However, if you are flexible with your dates, you may want to avoid renting during the peak period to avoid paying premium rates. Not to mention, if you put this off till right before the festive period, you might find that your car models of choice have all been snapped up!

 

What is Included in the Car Rental Package?

Different car rental companies carry varying assortments of car fleets and have different terms and conditions that are included in the car rental package. If you’re looking to save costs on car rentals, it is important to pay attention to the following details that entail renting a car. This may save you the additional expenses that may arise in certain circumstances.

 

Insurance Coverage

If you’ve never owned a car before and are looking to rent a car for the first time, insurance is something that you should definitely look into. It is advisable that you familiarise yourself with some of the terms included in car insurance.

 

Named Driver

If you’re renting a car for use among yourself and other family members or even friends, do ensure that all your names are stated in the contract. You should check with your car rental company to verify how many drivers are allowed to drive the rental car and if additional payment for insurance is required for additional drivers as the insurance company can choose not to cover unnamed or additional drivers.  If someone whose name isn’t in the contract drives the car, you may not be insured and this may result in additional costs when the need arises to claim insurance.

 

Excess

Excess refers to the maximum amount that you have to pay on your own in the event an accident occurs. For instance, if you are involved in an accident you will be liable for the Excess stated in the contract regardless of the repair cost which can be higher or lower that the Excess. However, if the accident is found to be 100% liable to the third party, the excess you have paid will be refunded. Do note that for those planning to drive into Malaysia, the excess may be even higher.

For those above or below a certain age or has driving experience less than the minimum required stated in the contract, you will be subject to an additional Excess on top of the stipulated Excess. If you are planning to drive into Malaysia, do note that in the event an accident occurs, you will be subject to a higher Excess.

 

Collision Damage Waiver (CDW)

If in the case of an unfortunate event where the car is subjected to some damage while you’re driving it, you will be held liable for the Excess stated in the contract. However, if you wish to lower the Excess liability, you can simply purchase a CDW when renting to lower the Excess. All you have to do is pay a little more upfront and you can drive with a peace of mind!

 

Theft Protection

While none of us ever imagine our rental car getting stolen, it is best that we are prepared for such a scenario. Theft protection insurance can protect you against the costs you would have to pay if your car or even parts of it get stolen. Just like how a CDW works, you simply have to pay extra upfront and the theft protection insurance will reduce your liability if the car gets stolen.

 

Accidents & Emergency Breakdown Services

Accidents can happen at any time, and it’s important that you can get help as soon as possible in such times of distress. Fortunately, ETHOZ has a 24/7 operating call center that can assist you if you need help in the event of a vehicle breakdown or accident. In the unfortunate event that an accident occurs, note down the vehicle number of the involved drivers as well as capture photos of the accident site for the accident report. Subsequently, report the accident within 24 hours to ETHOZ Accident Reporting Centre situated at Bukit Batok and Tampines to submit the accident report. The Claims Sales Executives at ETHOZ will arrange for the repairs to be made and also assist in resolving the insurance claims.

 

Driving to Malaysia

If you’re looking for a short-term rental for a road trip to Malaysia, it is important to make sure that this is included in the rental package, since not all rental companies allow you to drive their cars to Malaysia. While some car rental companies offer special packages for you to drive into Malaysia, some companies may charge an additional surcharge for crossing the causeway. Also, some rental companies do not provide insurance coverage and some of the smaller rental companies may not provide breakdown services in Malaysia. Do make sure you clarify with the car rental company before entering Malaysia to extra costs for your car rental!

 

Cheap Car Rental Singapore

If it’s your first time renting a car in Singapore, it may be confusing — especially with so many things to look out for to find the most suitable car. If you’re still having trouble deciding on a car rental package that would best meet your needs, simply give our team at ETHOZ a call at 66547788 or drop us an email at contactus@ethozgroup.com today!

 

5 Ways a Loan can Boost Your Business in Singapore in 2020

There’s been tons of talk about how business in Singapore is booming, but how? Well, in the Global Innovation Index 2019 released by the World Intellectual Property Organization, Singapore ranks amongst the top ten countries in the list and the #1 country amongst South East Asia, East Asia, and Oceania.

Singapore is known as a pioneer in implementing the best practice of knowledge-intensive employment and has proved to be a world leader in strategic partnerships. Complimented with an enterprising mindset and flexible working capital for modern businesses, Singapore is one of the globally acclaimed countries, when it comes to setting up state-of-the-art facilities and continues to remain a prominent hub for business; attracting foreign investors and small-time businesses, alike.

 

 

Changing Trends

Amongst all these economic developments, a major revolution that has become the trend in Singapore is the rate at which Small and Medium Enterprises (SMEs) are growing. According to the Department of Statistics, in 2018, SMEs have added a 47% of nominal value (S$447 Bn); out of which 38% are locally owned enterprises.

Like every business leader, the idea is to continuously grow the business and strive for excellence. That said, dreams and ideas may require a substantial investment, the lack of which, may alter the pace of growth for an SME. That is where managing cash flows becomes important and a loan can come handy. Here are five ways in which SME loans can help boost your business in Singapore this year!

 

 

1. Investing in future expansion

Exploring new markets requires capital. Finding out a centralized location, investing in the infrastructure, licenses, hiring; a loan will help support your new venture until it is self- sustaining with sufficient return on investment.

 

 

2. Stability for existing initiatives

From maintaining a healthy cash flow to paying salaries on time, down to investing in the latest technologies–a loan helps you, as a small business owner, to plan better and in turn, deliver superior products and services to existing and potential customers. It’s important to remember that loans aren’t just for large-scale expansions–they’re vital in helping you consistently maintain and improve on your business processes!

 

 

3. Supplementing new short-term projects

For times when vendor payments need to be disbursed in advance from your pocket before you receive the same from your client, a loan will help ensure that the project is executed without any obstacles. One can also consider exploring the possibility of investing in new technology to diversify or augment your current offering.

 

 

4. Security for hard times

Possibly one of the most common uses of SME loans, many small business owners in Singapore are advised to take out loans to tide through the early stages of launching a business. This is to stay one step ahead of potential financial setbacks so as to avoid letting your hard-earned business shut down due to a lack of foresight. A loan is an investment as well as a guarantee for the future.

 

 

5. Brand building and visibility

Marketing, as well as media campaigns, demand significant capital investments. And while many businesses have an allocated budget set aside for their marketing efforts, a short-term loan gives you the flexibility to make smarter and faster decisions, to reach a greater audience and create maximum impact, as and when the need arises.

 

 

What type of SME loans in Singapore Can I Choose?

There are two main types of popular loans that SMEs tend to opt for in Singapore:

 

 

SME Working Capital Loan

• To plan finances better every day.

• Funding capital for business operations.

• Maximum loan amount of S$300,000.

 

 

SME Fixed Assets Loan

• Security for fixed assets: Domestic as well as overseas.

• Funding for equipment purchase or upgrading and the purchase of business properties.

• Avail up to S$30 million.

 

 

Eligibility:

• Your business enterprise has to be registered and located in Singapore.

• Have at least 30% local equity held directly or indirectly by Singapore PR(s) and/or Singaporean(s).

• Have a group revenue of up to S$100 million or maximum employment of 200 employees.

 

 

Getting a business loan in Singapore is a hassle-free process!

According to an SME Development Survey released in 2018, finance-issues have been listed as the top-most roadblock that SMEs in Singapore have to face. But with the changing times, aid extended from the government and digital transformation listed as the theme of the year; a lot of SMEs have favourable things to convert 2020 into a year of milestones.

With the aim of increasing the quantum of locally-owned SMEs, our team at ETHOZ works to help SMEs obtain loans in Singapore. As a reputed financial institution, participating in the Enterprise Financing Scheme (EFS) administered by Enterprise Singapore, till date, ETHOZ has successfully provided personalized capital financing solutions to our clients, in Singapore and throughout South-East Asia as well.

To get more insight and advice onSME loans in Singapore from our team at ETHOZ, give us a call at +65 6654 7799 or drop us an email at contactus@ethozgroup.com today!

 

 

Why Your Business Should Lease Commercial Vehicles

It’s no secret that Singapore has become an epicentre when it comes to business opportunities– and this is true in a wide range of sectors. Companies from far and wide have begun to open headquarters within the region as a way to expand their business across ASEAN and Asia.

However, what many business owners don’t realise is the importance of having access to high-quality vehicles. Integrating the use of commercial vehicle rental in Singapore can have many benefits for your business–here are 6 major reasons your business in Singapore should lease commercial vehicles!


1. Leasing Offers Flexibility

Businesses should always aim to adhere to a strict budget, and purchasing a fleet of commercial vehicles may not be the most budget-friendly option depending on your situation–especially given the high cost of vehicles in Singapore!

Instead of buying your fleet, consider van rental in Singapore as a flexible alternative instead. With leasing, you don’t own the vehicle, and it’s yours to use during the dates specified in your contract. So if your business needs vans for mid to long-term purposes, this is definitely the way to go.

Not to mention, leasing also gives you the added flexibility in growing your business by expanding your fleet. When your leasing expires, you have flexibility in upgrading the vehicle, which is suitable for those with business expansion plans in the works.

At the end of your lease, it’s up to you whether you want to renew your contract or not. And if you decide to renew your lease, you may even opt for an entirely new fleet of vans and cars for an extremely cost-effective rate.


2. Vehicle Leasing Is an Affordable Solution

Singapore is one of the most expensive places to own a single vehicle, let alone an entire commercial fleet. It’s essential to find ways to save money when it comes to obtaining commercial vans or automobiles, and many business owners quickly learn that leasing is the most affordable answer.

Buying a vehicle in Singapore usually requires a down payment. That’s not pocket change. However, if you opt for renting vans in Singapore instead, you can get a much better deal by avoiding this huge down payment cost. This can be especially important for SMEs in Singapore that are looking to expand their operations.

Another benefit of leasing is that you can easily find a price point that fits your budget, and you can even alter the length or terms of your lease to meet your company’s usage. For example, you can choose to rent your commercial vehicles for a short-term or long-term period, depending on your needs.

This will save you any sunk cost you might otherwise incur from having to invest in purchasing a fleet of commercial vehicles on your own. Not to mention, vehicles always come with upkeep costs, even if they’re not actively being used all the time! So don’t just consider the initial cost outlay, factor in all the associated costs of owning a vehicle in Singapore.


3. Eliminates Maintenance

Like we mentioned earlier, owning a vehicle requires a lot of maintenance and upkeep—all of which comes at a considerably hefty price. And if you run a company, having a fleet of vans can potentially set your bank account in the red. An easy solution to this dilemma is to rent your commercial vehicles from a service provider you can trust.

For instance, at ETHOZ, our commercial vehicle rental service is designed to help you meet your business objectives. We quality assure all our vehicles to ensure that they’re running as they should so you don’t have to worry about constant upkeep while preventing possible breakdowns. Maintenance of the vehicles is included in the rental package which essentially translates to zero maintenance cost on your part. It is also a worry-free option as you do not need to go out of the way to source for maintenance quotes on your own!

Consider this: the more well-maintained your fleet, zero maintenance costs and downtime incurred.

Our team can also help you monitor and manage operating administrative costs, and performance efficiency.


4. Commercial Vehicle Support

The last thing you want is for your van to break down in the middle of a workday–but these things are unavoidable when you’re busy running a business! Even the best vehicles sometimes have problems, and if you own your fleet, you’ll have to find a way to get out of this sticky situation yourself.

But renting your vans and commercial vehicles can often come with supporting services such as roadside assistance, which means less operational and financial stress on your business! At ETHOZ, we provide 24/7 help to our customers as and when the need arises, so not to worry!


5. Save Time to Focus on Core Aspects of Business

As a business owner, there is already so much on your plate, with various administrative matters to tend to. Leasing your fleet means that you can spend more time productively — managing the different core aspects of your business while leaving tasks such as planning and scheduling of maintenance of the vehicles to ETHOZ.

As we mentioned earlier, ETHOZ’s fleet management team dedicates their time to monitoring the rental fleet’s operations and performance efficiency. This eliminates the need for you to assign headcount to manage maintenance — a time and cost-effective option for your business!


6. Replacement Ready

Reducing vehicle downtime is always a concern for business owners as it invariably incurs cost. Minimizing this downtime is one of the ways business owners seek to optimise their operations. Luckily ETHOZ provides replacement services for you at your convenience — one of the perks of renting commercial vehicles!

ETHOZ has a ready replacement fleet at their disposal which will definitely reduce the vehicle downtime for your business in the case where your vehicle needs to be replaced or sent for maintenance. In the case of scheduled maintenance, a replacement vehicle will definitely be provided so as not to disrupt your daily operations. In the unfortunate case of a breakdown, a replacement will be arranged for you as soon as a suitable replacement vehicle is available.


Rent Your Commercial Vehicle Fleet

Renting commercial vehicles in Singapore definitely comes with tons of benefits for your business, but before you decide to lease any vehicles in the long term, always check in on what your rental company has to offer! But if you’re still struggling to decide on a commercial vehicle rental provider to work with, don’t hesitate to give our team at ETHOZ a call at 6654 7773 or drop us an email at contactus@ethozgroup.com today!

3 Simple Ways to Expand Your Business in Singapore in 2020

Despite the global economic slowdown that has affected our trade-dependent Singapore, the local economy averted a recession in 2019 and continues to demonstrate promising growth. Fortunately for businesses in Singapore, there are tons of support measures to increase productivity and upskill workers to prepare and strengthen our economy in the face of challenges. Thus, 2020 is the year for Small and Medium Enterprises (SMEs) in Singapore to grow and for businesses to start shifting their priorities!

There are countless ways to improve and expand your business this year. In this article, we’ll discuss 3 simple but transformative ways for your business to thrive in Singapore this year.

 

Start By Doing Your Checks

But before we start identifying new sources of revenue, we advise that you always carry out a thorough review of your business plan first! Ensure that your business is moving in the right direction of your vision, that your financial projections are reliable, and that your core products and services are well-defined. It’s also imperative that you understand how you match up to your competitors in the industry so that you can clearly envision how your plans in 2020 will put you ahead of the curve.

 

1. Increase Your Product/Service Mix

Before you can stay ahead in this competitive business scape, it’s most important to stay relevant. While there is a lot to be said about sticking to a specific product or service category and perfecting it, it’s important to see how the changes in the market affect overall demand.

Increasing your product/service inventory is one way of expanding your business without changing existing operations. For instance, think about recent trends that are happening in Singapore, and predict what kinds of products or services that people want. How much are they willing to pay for it, after accounting for your profit margin? The next step is to do your groundwork — such as testing out your products or services on a small group of people that highly resemble your target audience, and asking how much they would want to pay.

 

2. New Sales or Delivery Channel

Integrating digital technologies into your business’ systems and processes is an on-going and invaluable addition that can completely change the way your business works, and help you achieve a new level of efficiency!

In the aspect of business expansion, it means being able to reach out to new consumers directly via digital marketing — utilising advertising and search engine optimisation (SEO) tactics — and selling products on a digital storefront. Over time, actionable insights can be derived from data on these new consumer segments and can be gathered to guide the business strategy in the future. Supported by local legislation to help SMEs, technological integration should be practised by every company to reap the benefits of new sales and delivery channels.

 

3. Expand Your Market Reach

While starting small and focusing on Singapore’s market is a great stepping stone for many businesses, you can and should seek foreign market opportunities and even other niches that your business has not explored.

These new markets should exhibit strong demands for your product or service offered. However, expanding geographically and cross-industries can bring plenty of opportunities and pitfalls as well. To avoid costly blunders as much as possible, you should carry out a detailed analysis of the new market’s nuances, such as how the demographics might differ from that of Singapore’s. This is crucial as advertising techniques and how you reach out to consumers or businesses could also change.

 

Business Financing Considerations in Singapore

For those seeking to grow their business this year, planning ahead in advance to secure funds for your projects will save you from unnecessary headaches. Not only will you have the best terms from the lender, but also ample additional time to prevent any possible hiccups.

Especially for small businesses, gathering your finances can be one of the most challenging tasks. Thankfully, the Singapore government is very supportive of local incubators and funding schemes for SMEs. Under the Enterprise Financing Scheme (EFS) by Enterprise Singapore, we provide a range of financing schemes and loans for SMEs to purchase infrastructure, equipment, upgrades, and more.

This way, SMEs are able to obtain funds more easily when they need it during times of need — such as an increased customer demand or for Research & Development (R&D) purposes. No matter the growth stage of your business, there will always be a suitable business financing scheme to suit your needs. Find out more about our financing solutions or simply reach out to a member of our team at contactus@ethozgroup.com to explore the options available to you. If you like reading more of such content, head over to our blog to learn useful tips and case studies that can help your business!

 

 

Traditional Banks vs. Digital Banks: Which is better?

In the last decade, we have seen the migration of an increasing number of businesses onto digital platforms, as traditional industries are being disrupted. Amongst the latest to be gripped in the throes of a digital disruption is the banking industry. The latest Fintech developments and startups are determined to haul the musty, antiquated business out from behind the image of stuffy suits and even stuffier structures of marble clad capitalism and propel it into the future.

Ever keen to embrace innovation the Singapore Monetary Authority recently made an official announcement to open the banking sector to digital players.

In the announcement, it stated the intention to grant licenses to two digital full banks (DFB) and three digital wholesale banks (DWB), with the former serving retail customers and the latter catering to SMEs and non-retail clients. With even more options to choose from, customers are certainly spoilt for choice but deciding which is better depends on a myriad of personal factors.

 

 

Digital Bank Boom

The digital revolution really took off with the advent of the smartphone, with its ability to connect with individuals at all times, in a personal capacity, amid relative security. This, in turn, led to changing consumer habits and demands. Waiting days for a bank transfer, which was accepted before, is now intolerable. Opening an account is too slow if not processed within minutes and too troublesome if it has to be done in person. Catering to a world accepting nothing less than the highest level of convenience and value, with the lowest amount of commitment, digital banks rose to serve those needs. While leveraging on technology, Fintech was born into this brave new reality. Operating primarily online, with little to no physical presence, digital banks, also known as neo banks or challenger banks is the next big Fintech trend -only establishing itself within the last five years in the UK, then catching on in the rest of Europe. Digital banks like N26 from Germany, Revolut and Monzo both from the UK are the major players at this time and have quickly attracted the attention of clients and investors alike.

Headquartered in Berlin, N26 serves a client base of 3.5 million as at June 2019 and having been valued at US$2.6 billion, it is a unicorn more than twice over. Its expansion plans into the US has been underway since July 2019 and it has ambitions to grow its client base by 43% by 2020.

As of June 2019, Monzo is hot on the heels of rival N26. Also eyeing the North American market, it has entered multiple rounds of fundraising on a valuation of US$2 billion, earned from its respectable client base of 2 million subscribers.

The London based Revolut boasts 8 million customers and grew from a valuation of US$1.7 billion to US$10 billion in the space of 2019 which isn’t even over yet. It’s focus is on Asian markets and it is preparing for a Singapore launch in 2020.

 

 

Client Centric Focus

There is no doubt that this new breed of banks is exactly what people have been dreaming of for a long time. All of them have adopted popular policies and given up many traditional service revenue streams in a bid to appeal to customers. A majority have done away with the numerous service fees that accompanies many traditional bank’s functions to win over clients.

To travellers, Monzo’s zero fee structure for spending overseas, zero foreign exchange rate markup and no fees for overseas cash withdrawals up to £200 within a 30-day period is an attractive proposition.

N26 is geared towards freelancers and the self-employed. A current account charges no maintenance fees and does not stipulate a minimum balance. There are no charges on overseas spending and for transfers in the same currency as the account.

If holding and dealing with multiple currencies is something that you encounter often, then an account with Revolut makes the most sense for you. Opening and maintaining an account is free and the account can hold multiple currencies. Additionally, SWIFT transfers to overseas accounts is free and foreign currency exchange rates do not have a spread or any additional charges.

There really is no best digital bank account, as each serves a specific need or customer niche. As such, it would be wise to scrutinise the terms and offerings of several digital banks before picking one or more to sign up with.

 

 

SME Working Capital Loans And SME Fixed Assets Loans Made Easier

Another niche segment that digital banks are aiming for is the underserved SME market, especially as many of them seek SME working capital loans or SME fixed assets loans to keep skin in the business or prepare to expand operations.

As a Fintech company, these banks are willing to utilise non-traditional methods and algorithms to assess credit worthiness.

Compared to traditional banks, the turnaround time is much faster than the average thirty days for regular banks. Loan offer quotes are also provided instantly with a few swipes on the smartphone and there is often no paperwork required. Revolut also has a similar offering and like N26’s business loan, the maximum amount is capped at roughly US$30k to US$50k.The upside is that although the interest rate offer can vary, it is comparable with what normal banks charge.

 

 

Ironing Out The Kinks

Whether you are an individual or a business owner, the new face of banking is one that will appeal to you with its many flavours. However, it does come with some downsides. The cost savings that customers enjoy ultimately comes out from cost efficiencies and savings that digital banks eke out relentlessly. Staff shortage is one area that can become an issue as it did with N26 in Germany recently, resulting in a customer complaint about an €80k fraudulent transfer being addressed only after several days.

An irony is that, on the whole, digital banks offer a lot of flexibility, but within itself, it has limited features when compared to full traditional service banks. If you choose the wrong digital bank, you may find yourself actually paying more in fees. For example, different digital banks have a different limit on daily cash withdrawals, after which a transaction fee applies. This could range from free withdrawals up to US$200 daily at one digital bank to US$800 at another.

As positive as the future looks for digital banking, the industry is still rapidly evolving. Bank regulators are calibrating to adapt to the new entrants and any regulatory gaps that exist between them and traditional banks will eventually narrow, possibly increasing compliance costs. There is also a chance of additional regulatory requirements to combat the increased risks that digital banks face with their business model which makes it easier for criminals to conduct activities like money laundering.

Most of all, though, is the uncertainty of digital banks as a going concern. As yet, none, not even the largest ones like Revolut and N26 have turned a profit in almost four years of operations. This has not gone unnoticed by the public, which is used to wildly popular and ‘successful’ start-ups with plenty of followers and funding money but no profit or even suffering staggering amounts of losses. Consequently full converts to digital banks only make up about 10% in even the most mature market, the UK.

Further reports cite that most people view digital banks only as avenues for short-term spending, and would not deposit more than SG$20k in digital banks.

All in all, it is an exciting time in the industry and it is a welcome change to see banks actively and genuinely thinking out of the box. Though the changes are promising it remains to be seen if it is sustainable. For the time being, just hop onboard and ride the gravy train.

 

 

The Emergence of Digital Banks

Money – we all need it, we all have some of it, and we all definitely want more of it. Yet money is a made-up concept based on the most capricious of human traits: trust. Most currencies have long abandoned any links to valuable assets like the gold standard  and in recent times has even shed its tangible form. Our personal net worth, the holdings of large NMCs and even a country’s national reserves are all almost entirely based on a system of digitised binary signals sequestered behind the walls of the most conspicuous institutions of human civilisation, banks. These venerated institutions often occupy the most prominent locations in the city, emblazoning the skyline with their logos, looming large in the center of business districts with their facades of corinthian columns in gleaming white Italian marble. However, these steadfast institutions are feeling the foundations of their ivory towers being shaken by the digital revolution.

 

 

The Digital Bank Challenge

The decade old financial crisis of 2008 besmirched the reputations of traditional banks and left an indelible mark upon both its customers and investors, leading to the birth of the first Fintech start-ups in the midst of bailouts and austerity measures. Fully digital banks like Atom and Revolut in the UK, and Germany’s N26 were the first to lead the charge in disrupting their brick-and-mortar rivals in the early years of this decade. In the next few years this new wave of challenger banks arrived on Eastern shores. China, Hong Kong and now, Singapore, is jumping onto the bandwagon.

The accepted status quo of the banking industry does not apply to digital banks. They are the free spirits of the finance industry, willing to explore new ideas and fresh new ways of doing business while still striving to make it all commercially sound. Leveraging heavily on technology, these upstart start-ups bring the bank teller window to the client via the smartphone. Opening accounts, forex transactions, insurance, loans and other financial services are made simpler, quicker and cheaper. Digital banks operate leaner, nimbler and more efficiently and have adapted to meet the demands for around-the-clock convenience from today’s consumers. This makes up a large part of their appeal as they are able to serve a greater pool of clients or niche group of clients that traditional banks have largely ignored due to inflexible customer profiling and entrenched practices. More importantly, costs are lower because traditional infrastructure is not needed, and neither is the corresponding manpower to facilitate it. This allows basic services to be offered for free or at a substantially lower cost. Among those that stand to benefit are the new crop of entrepreneurs and gig workers that have come to characterise the evolving demographics of employment across the globe.

 

 

SME Working Capital Loans & SME Fixed Assets Loans

SMEs by their nature are risky endeavours and as such are often viewed with caution by investors and banks looking through loan applications. Funding is consequently sorely lacking and expensive. A typical complaint of SMEs is prohibitively costly SME working capital loans from traditional banks and that even government productivity schemes with subsidised SME fixed assets loans are not attainable across the board. Statistics from the World Bank highlight that 40% of SMEs in developing countries are unable to meet a financing need which equates to a potential market worth US$5.2 trillion annually.

Digital banks are able to tap on non-traditional sources of funding such as peer-to-peer lending to provide financing to SMEs. Temasek Holdings, Singapore’s sovereign wealth investment firm even backed lending platforms by throwing its weight behind Validus, a peer-to-peer lending platform looking to expand into Singapore.

For start-ups, just the partnerships with large local corporations like these contribute value by providing its clients with an association to these blue-chip entities which is seen as a strong vote of confidence. The benefits extend beyond an elite association too, as expertise in running a business is transmitted through loan conditions.

Traditionally, banks determine their loan offers to SMEs based on risk metrics. The usual toolkit consists of collateral, guarantor or cash flow pledging, amongst other types of surety. Digital banks do not give away money carelessly, nor are they exempt from industry regulations but once again utilise technology to assess the creditworthiness of a potential client. Big data provides a more accurate picture as opposed to time worn methods that overburdens clients. In keeping with this direction, digital credibility is being explored as an alternative method of pricing and granting loans. Similar to the mechanics of rating vendors on apps like Grab, Ebay and Carousell, statistics such as service scores, number of bad reviews, social media activity can be harnessed to form a clearer profile of potential clients.

 

 

The Future or Fad?

As with the first movers in any new industry, it may seem that these new challengers are the only ones moving forward. It would be short-sighted to assume that conventional banks are standing still in the face of disruptive competition. All modern banks have been forced to take their operations online and to emulate the client orientated focus of their digital rivals.

Regulators are also keeping an eye on the new breed of digital banks which have an as-yet untested business model and face greater business and security risks due to the lack of personal interaction with clients. Regulatory restrictions will eventually converge for both, narrowing any advantage one has over another.

A true picture of the sustainability of digital banks is obscured by fervent funding at the moment which sustains their operations in this growth phase where the bottomline still remains in the red. As this segment matures, a more level playing field will emerge. A natural progression of digital banks would also naturally gravitate towards providing a stronger customer connection that goes beyond savings on fees. Otherwise, they will be stuck serving only the niche sectors that they currently thrive in.

The move to greater digital presence is unavoidable and the future of banking most likely sees an aggregation of both business models. Traditional retail banks that lack a digital presence would have to duplicate the business model or merge with existing digital banks to acquire this capability. This is a desirable outcome to for digital banks as investors start to demand a return on their seed money or when they seek to grow beyond the niche markets that they currently serve. On one hand retail banks have the financial experience but lack the mobility and technological expertise while on the other there is a Fintech firm with a ready-made turnkey solution without an established client base – sounds like a match made in heaven to me.

 

 

Micro Loans: Examining the Once-Believed Solution to Poverty

Driven by the peer-to-peer economy that has drastically shifted and influenced traditional business practices, micro loans (also known as micro credit) are small loans given out by independent individuals or a group of individuals that each offer a portion of the overall amount, instead of large institutions such as banks and credit unions. Used most widely in developing nations that lack access to modern banks, this form of micro financing exists to aid the survival and growth of small businesses.

One of the chief elements that catapulted the popularity of microlending is the fact that anyone can participate and invest in these third-world businesses. Coupled with the advancement of technology and the Internet, the market is now a lot more accessible, providing an individual in Singapore a swift avenue to give out micro loans to someone from across the pond. The entire process, from finding a lender, to making the transactions, can all be done online.

It’s a useful way for individual lenders, with loads of savings sitting in their bank accounts, to not only boost these businesses run by low-income folks, but also earn a little bit of interest at the end of it. Or rather, a whole lot of interest, since low-income borrowers are likely to default their loans. That’s good news for the lenders who stand to benefit from above market interest rates.

Still, it’s not a completely Utopian arrangement. These micro loans don’t usually come secured by collateral–property or assets that can be seized if the loan isn’t repaid–so if the borrower isn’t able to pay up, it’s likely for the lender to get nothing in return. The obvious risks involved in funding low-income borrowers and businesses could lead you to lose a ton of money, if you don’t know how to strategize and spread the risk. If you do, that is, putting tiny amounts of money into each loan while managing a diverse portfolio of multiple micro loans with different credit qualities, you could turn a profit.

 

 

The History of Micro Loans

Before it reached bigger banks looking to serve SMEs, micro loans were pioneered by Grameen Bank as a way to help and empower the poor. If you dig deeper into history before the existence of the term, micro loans or microcredit, you’ll see that the concept itself isn’t new. Jonathan Swift, the notable author of Gulliver’s Travels, in fact was making micro loans to the destitute in Ireland in the early 18th century before micro loans were a thing.

It was only formerly introduced and rebranded in the late 70s when Muhammad Yunus, a social entrepreneur, banker, economist and Nobel Peace Prize recipient from Bangladesh, realised the potential of micro loans as a viable method of lifting people out of poverty. Furthermore, he believed that “all human beings are born entrepreneurs”. Fuelled by this new idea, he went on to establish Grameen (which means “village”) Bank in 1983. Soon after this Bangladeshi bank revolutionised and popularised micro loans, the rest of the world followed suit with more than 3,000 companies entering the microcredit arena.

Grameen Bank played a key part in shifting the ingrained mindset that lending money to those in poverty who earn just a few dollars a day, will only trap them in debt. It focused on the fact that these people are running microbusinesses, and the provision of loans will help them earn a lot more—more than what they owe their lenders. It works in a cycle, which starts with lending a sufficient amount of money for microbusiness owners to expand their enterprise and exit the poverty pool. The repaid money will then go towards other borrowers, kickstarting their exits as well.

Beyond that, Yunus was also involved in appealing to external funders such as the Ford Foundation. Eventually, this business financing model gained traction, as well as the attention of a slew of investors who took microfinance to the next level. It garnered global development from the 80s to the early 2000s, and most recently hit about 211 million worldwide borrowers in 2013.

 

 

The Mechanics of Micro Loans

In the early days, the original model developed by Grameen Bank mandated that once a loan is issued, repayment begins immediately and stretches out over a year or two. It also introduced group loans, where the loans are shared between a group of borrowers from various households who can help encourage each other to pay up. At that time, Grameen Bank didn’t have physical outlets either, relying instead on individual officers to gather the villagers and borrowers every week to distribute loans and collect payments.

Modern-day versions of this model such as Singapore’s Micro Loan Programme (MLP), on the other hand, work a little differently with different criteria. The MLP, for instance, prioritises the business over the borrower. Not only must the business be registered and incorporated in Singapore, it has to hold at least 30% local shareholding, and have no more than 10 employees or no more than $1 million in annual sales.

 

 

Did Micro Loans Work?

In spite of Yunus’ lofty aspirations, there’s been no concrete evidence of micro loans eradicating poverty on a massive scale. On the contrary, some view it as a crutch, much like how credit cards have not helped but exacerbated the surmounting worldwide debt problem. The popularity of micro loans suffered a major hit around the 2000s when critics started exploring the possibility that these loans may, in fact, be detrimental to its customers.

The issue with microcredit institutions is that they are, at the end of the day, businesses looking to make a profit as well. Yet, their mission is poverty alleviation, an altruistic, non-profit goal. This clear conflict of interest makes it easy for such institutions to fall into the enticing trap of exploitation, raising interest rates to a level that is no longer beneficial to the low-income borrowers. They could argue that it’s necessary to cover costs, but they’re really no better than your average avaricious loan shark.

So out-of-hand has the situation become that the government of Indian state Andhra Pradesh ordered for the closure of microfinance firms in 2010, citing reasons such as overindebtedness and the increased suicide rate among borrowers. As a series of studies confirmed in 2015, the microcredit strategy failed to boost the average income of borrowers.

 

 

The Little Triumphs of Micro Loans

Nevertheless, it wasn’t a total washout. Researchers of those studies also found that people are dedicating more time towards their small businesses and shifting their spending habits. Thanks to Grameen Bank, the microcredit scheme made way for more reliable financial services for low-income groups in developing nations. During emergency situations, in particular, these folks are able to obtain the funds they need to tide over the temporal crisis. It turns out that borrowers are using these micro loans to pay for everyday purchases as well because feeding a family is more important than their entrepreneurial dreams.

Not to mention, it’s moved the needle significantly in terms of empowering women. From Grameen Bank’s commitment (alongside other firms) to offer loans to women, they’ve managed to grant a bit more financial freedom to the half of humankind that’s long been oppressed and undermined. Today, about 80% of micro loan borrowers are female.

Although micro loans haven’t lived up to its expectations as a cure for poverty, there’s no doubt it’s taken small steps to improve the lives of impoverished folks. Take the case of Andhra Pradesh as an example. After the state destroyed its microlending firms, the overall level of salaries in its rural zones dropped as well, proving if anything that micro loans are a right step towards a healthier economy for rural communities.