How much Working Capital Loan does my SME need?

In this sequel, we address the numbers question. How much Working Capital Loan does my business need?

An ideal working capital management can be defined as striking a balance between two key factors: profitability and liquidity. Profitability is determined by the use of cash to invest in long-term assets. For example, Research and Development. These assets maximizes returns in the long run. Liquidity refers to a sufficient level of cash on hand. This sum aims to cover operational expenses, repay debts and still have an adequate amount left. A business should have a financial reserve at all times to minimize the risk of insolvency.

A useful tool for determining the health of your business’s Working Capital is the Working Capital Ratio.

Working Capital Ratio = Current Assets / Current Liabilities

A general rule of thumb for Working Capital Ratio, a healthy ratio lies between 1.2 and 2.0.

If your Working Capital Ratio is lower than 1.2, your business may have difficulty with operational cash flow. This includes footing your bills and repaying debts on time. Your business is also susceptible to insolvency issues in times of financial emergencies.

If your ratio is higher than 2.0, it can be an indication that your business is not maximizing its profitability potential. The cash can be put into better use in investment and new growth opportunities. The aim is to generate profit in the long run.

The Working Capital Ratio equation helps businesses find the pivotal point between profitability and liquidity. A business needs to have ample cash for business operations and repayment of debts. However, not to the point of having excessive cash lying stagnant. This helps you figure out how much Working Capital Loan your business needs.

To find out more on how ETHOZ can assist your business with Working Capital Loans, call us at 6654 7799. Alternatively, drop us an email at contactus@ethozgroup.com for a non-obligatory discussion!

 

 

5 Types of Working Capital Loan for SMEs in Singapore

In the first article of this series ‘A Guide to Working Capital Loans for SMEs in Singapore’, we covered 5 Reasons why SMEs in Singapore need Working Capital Loans. In this segment, we look at the various types of Working Capital Loans. While each type caters to diversified business needs, they share a common objective of helping businesses manage cash flow. Here are the 5 most common types of Working Capital Loan:

 

 

1. Accounts Receivable Loan

A form of Working Capital Loan, an Accounts Receivable Loan is a loan taken out based on its accounts receivables. Examples of accounts receivable include invoices or cash owed by customers to the business. Taking into account factors such as the age of the receivables, a financial institution usually loans out a sum that matches or is less than the receivables’ value. An Accounts Receivable Loan alleviates the problem of cash flow trapped in unpaid debts, improving cash flow.

 

 

2. Merchant Cash Advance Loan

Similar to an Accounts Receivable Loan, a Merchant Cash Advance Loan works by exchanging future assets for immediate cash. The difference between the two lies in the asset being traded in. For Merchant Cash Advance Loan, the asset is future credit card sales. When a business takes up this Working Capital Loan option, it receives upfront working capital. The loan will then be paid off through daily deduction of a certain percentage. For example, a merchant deducts 15% of your daily credit card sales until he has fully recovered the advance. This type of loan is only applicable to businesses that accept credit card payments.

 

 

3. Trade Credit Loan

A Trade Credit Loan allows a business to delay the payment for goods and services. Under this Working Capital Loan arrangement, the bank or financial institution pays the supplier upfront. While the bank receives the title of ownership, it allows the business to take possession of the merchandise for manufacturing or sales purposes. This is certainly useful for businesses which are only able to make payment after cash inflow from sale of inventories. If your business faces difficulties repaying the full amount on the loan due date, some banks or financial institutions offer the option of converting to Trust Receipt. Trust receipt allows for repayment on an installment basis.

 

 

4. Line of Credit/ Overdraft Loan

A bank overdraft is a flexible borrowing facility granted by a lender on a bank current account. It allows borrowers to tap on a cash supply within a limit granted by lenders for working capital needs. The key benefit of an overdraft is the flexibility to make repayments at any point in time without incurring early repayment penalty. The risk lies in the overdraft being subject to the annual review of the financial institution. In this case, a business must return the difference in amount after review to the financial institution immediately to prevent an adverse impact on your credit record.

 

 

5. Business Term Loan

The most straightforward type of Working Capital Loan, a Business Term Loan is repaid in a structured way. It is disbursed with a fixed repayment period which spans 1 to 5 years. The interest rate can be fixed or variable, depending on the financial institution you are borrowing from.

In partnership with Spring Singapore, ETHOZ is committed to growing promising SMEs in Singapore. Under the Local Enterprise Finance Scheme (LEFS), we provide SME Micro Loans or Business Term Loans. These loans support local SMEs with amounts up to $100,000 and $300,000 respectively.

To find out more on how ETHOZ can assist your business with Working Capital Loans, call us at 6654 7799. Alternatively, drop us an email at contactus@ethozgroup.com for a non-obligatory discussion!

 

 

5 Reasons Why SMEs in Singapore Need Working Capital Loan

What is a Working Capital Loan?

A Working Capital Loan is a loan that finances the day-to-day operations of a company. This covers product development, rental, accounts payable and staff salaries. It does not include purchase of long-term assets such as property, machinery and equipment.

 

 

5 key reasons why SMEs in Singapore need Working Capital Loans:

 

 

1. Inconsistent Cash Flow

Especially for young start-ups, generating a steady stream of income in immediate may not be a practical expectation. During dry seasons, a Working Capital Loan ensures that bills are paid and daily business operations continue to run smoothly. In some arrangements, customers only pay on delivery of goods. In this case, a Working Capital Loan bridges the financial gap between the collection of accounts receivable and accounts payable.

 

 

2. Sales Fluctuation

Large dips and peaks in demand can be effected by several factors. Factors include change in season, trends, the global and local economy, population and technological advancements. Having a Working Capital Loan allows you to react effectively to evolving demand. When demand peaks, a Working Capital Loan equips you to divert resources to optimizing output. Similarly, it dulls the impact when demand dips by allowing you to make reflexive decisions. For instance, clearing of inventories at a lower price.

 

 

3. New Business Opportunities

Making business decisions is all about timing. A Working Capital Loan financially empowers you to take advantage of an opportunity when it presents itself. Business opportunities include product innovation and expansion into new markets. In such situations, seeking for investors or waiting until your profits allow for it may cost you the opportunity. At times, the opportunity cost of missing the time frame can be more costly than the value of the loan.

 

 

4. Emergency Fund

Having a financial reserve to tide over unexpected expenses is essential. No matter how meticulous your business planning and projections may be, unexpected surprises may come knocking on your door. From machinery breaking down to a long-standing client discontinuing your working relationship, these issues can be costly. A Working Capital Loan allows you to repay the debt over time. As a result, the impact and cost will be spread out.

 

 

5. Debt Restructuring

A business may take on loans from various entities at different stages. Over time, it may become increasingly strenuous to keep track of the different repayment terms. A loan that consolidates your borrowings makes your finances more manageable. Restructuring also allows you to take advantage of lower interest rates. This potentially reduces your total monthly repayments. Freed up cash flow can therefore be diverted to other areas such as product development or business expansion. Lastly, taking up a new Working Capital Loan is an alternative to defaulting on existing debt.

To find out more on how ETHOZ can assist your business with Working Capital Loans, you may reach our friendly Relationship Managers at 6654 7799. Alternatively, drop us a message contactus@ethozgroup.com today!.

 

 

How Much is Your Business Going to Cost?

You’ve progressively adumbrated a brilliant idea in your quiescent mind. But you’ve mostly spoken lightly about it because while you can foresee the benefice, you’re not sure how much you’re going to need from the get-go.

Well, guess what? It’s 2018, and the buzzword of the year seems to be disruption.

From the way we travel to the way we work, we’re talking about digital technologies changing life in every way possible. The digital age purports a bright future full of opportunities – and it is an exceptionally apt time for aspiring entrepreneurs to steer the wheels of disruption to their advantage.

Of course, even with the all right tools in all the right places, you’re going to need numbers. I’m talking about the dollars and cents that are going to determine if your idea remains in fleeting thoughts or translated onto paper and real results.

Before we go anywhere, I’d suggest reading up a couple of start-up guides. Check out the five recommended books to read before starting your business put together by online business resource hub Entrepreneur!

 

 

Upfront Costs

These are fees you, unfortunately, cannot avoid if you’re thinking of setting up a business here in Singapore.

As long as your business is intended for long-term profit making, you’re going to need to do is the register with the Accounting and Corporate Regulatory Authority (ACRA). That would cost you S$315.

Depending on the nature of you business, you should also consider other costs including permits, licenses or compliance costs, a website and domain name, and registering your intellectual property.

The good news is all these are one-time costs, which means they do not present as recurring bills so it’d give you a good idea of how much you need minimally to start a business.

Once you register your business, it’s official. Any business, regardless of size, is a long-term commitment so before you plunge into the black-and-white, explore these sources for a breakdown of funds you’re going to need:

 

 

1. Are you franchising?

If your idea has already been established by a reputable brand, franchising is a great option. An in-depth discussion with the franchisor will likely give you lots of insight about start-up costs but don’t take these numbers as absolute. Your actual budget would definitely vary by a margin taking into account the location of your business, among other factors.

 

 

2. How niche is the market you’re breaking into?

Truth is, many new ventures today improvise existing business models to fill the gaps that current business failed to fill. What was a particularly niche market some 50 years ago could well be saturated today. But that also means you’re able to find entrepreneurs who own businesses similar to the one you’ve got on hand. Chances are, your future competitors wouldn’t want to assist you but you can always research outside of geographical location.

 

 

3. Do you require supplies?

Get on the phone and approach several suppliers. It’s okay to be forthcoming and tell them you’re intending to start a business. These suppliers will be equally forthcoming because they want to earn money from you. When you’re on the phone with a supplier, ask about working capital loan, equipment leasing, bulk-buying discounts, credit terms, inventory packages and other options that might lower your upfront costs.

Don’t ever be in a hurry to settle for the first few suppliers you contact, though. Aim to do some price comparison – that could make significance differences in your start-up costs!

 

 

4. Are you going to need a workspace?

If your business is retail-based, you might need a warehouse to store your stocks and possibly a physical storefront for retail operations. Rental leases will always demand at least two month’s payment as soon as you sign the agreement. Depending on how fast your business turns over, it is advisable to set aside at least four months of rental from the get-go.

If you don’t require a storage space or a physical space but a simple workstation, options are aplenty! In order for your business to flourish while working from home, you need to demonstrate the same kind of discipline you would with an office job ie. waking up at 6am, starting work at 8am, and actually working the full eight and a half hours. If you already know you won’t be able to commit that way, consider co-working spaces (JustCo, the Hive, The Working Capitol, etc).

If you don’t require a regular workstation, you can definitely cut costs by making use of public space (e.g. libraries, cafes)!

 

 

5. How big is your team going to be?

No one is a one-man island so you’re probably going to need some extra helping hands. But what kind of helping hands do you need? Realistically speaking, different expertise will command different pay grades. Thankfully, with digital disruption, we’re looking at an age with undefined job roles so while one person is equipped with various skills you’re looking for, you must not forget the basic benefits (annual leave, medical leave, hospitalization, etc) employees are entitled to. Don’t forget their CPF contribution as well!

Give it some detailed thought. Your budget will shift according to how big your team is expected to be.

With all these numbers here there everywhere, it’s definitely a great idea to fall back on the good ol’ Excel to help you forecast your cash flow for your first 12 months of business.

Do not be disheartened to find that you’re going to end up in deficit. It’s normal to operate at a loss when you first start, which is why this spreadsheet will give you a good idea how much you’ll need in reserve to sustain during this period.

ETHOZ is committed to growing promising SMEs in Singapore. If you would like to find out more about how ETHOZ can assist you and your business, you can contact our friendly Relationship Managers at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

 

 

Singapore’s SMEs Flying High

Singapore’s very founding is rooted in a strong sense of entrepreneurism. Our forefathers crossed great oceans to strike it out in this veritable emporium of the East. Even today, small-medium enterprises (SMEs) make up the beating heart of Singapore’s economy. They comprise 99% of enterprises on the island which,  numbers roughly 188,000 entities, contributing up to 50% of our nation’s GDP, and providing employment to 65% of the workforce. Jostling alongside globally recognised MNCs for business both locally and overseas, these figures might come as a surprise to most.

SME’s, are described by the Ministry of Trade and Industry Singapore as companies with group annual sales of not more than $100 million or group employment size not exceeding 200. Even in the USA, SMEs pack a powerful punch, comprising 97.9% of all employer firms and provides more than 45% of GDP.  Although small in size, they are valued for being nimble – being able to adapt to changing situations, customer needs and changing client requests, highly innovative and scalable are all hallmarks of SMEs.

 

 

Drivers of the Future

As drivers of a country’s future, it is then only right that there is so much emphasis on SMEs by government bodies. In Singapore, there are several organisations created especially to provide assistance, financing and guidance to SMEs, such as A*Star, Spring Singapore, IE Singapore, and separate agencies like IMDA (Info-commercial Media Development Authority) and GovTech (Government Technology Agency of Singapore). This has helped greatly in encouraging a fledgling entrepreneurial spirit and drive for innovation in the nation.

In most aspects, Singapore is already a nexus point for ideas, start-ups and creativity, much in the same vein as Silicon Valley, Tel Aviv, Bangalore or London. Google, Paypal, Facebook, Amazon all maintain a presence on the island. Venture capitalists, the likes of Eduardo Saverin’s B Capital Group and Sequoia Capital have followed to provide their services and the community has been thriving since the last several years. With a vibrant, burgeoning scene, access to funding and developing markets not yet saturated with players, this is the place to be and the time is now.

 

 

Making Waves in Asia

Grab, with headquarters in Malaysia and Singapore, is a regional poster boy where prominent, successful and international start-ups are concerned. Founded only in 2012, Malaysians Anthony Tan and Tan Hooi Ling have ousted rivals the likes of Uber in several markets and acquired funding of US $2.7 billion.

Sea Group, more recognised by its gaming arm, Garena which is an internet gaming platform provider, attracted funding of US $1.4 billion. This shot in the arm allowed Singaporean CEO and founder, Forrest Li to diversify from fun and games to internet shopping and digital financial services.

Taking on the likes of Netflix, is Viu Singapore, that picked up US $110 million in funding. Since its launch in late 2015, it has acquired 12 million monthly subscribers across Asia and the Middle East, with plans to serve 20 million by 2020.

Aside from attention-grabbing tech companies, Singapore’s F&B SMEs have also found success by making forays into neighbouring countries. Breadtalk, the bakery, and even Bee Cheng Hiang, the barbequed pork chain have both penetrated markets as far away as Japan. Even banks, with its traditionally prudent approach to working with SMEs have begun to tailor its offerings to this sector which, have seen venture capitalists and angel investors snap up chunks of the pie. Case in point is OCBC and Lion Global Investors establishing a private equity fund in 2015 to invest in SMEs in Singapore, Malaysia, Indonesia and China.

 

 

Bright Sparks Despite Difficult Times

It seems that SMEs have got it made but the truth is that topping the competition is a hard worn battle. Competitors can come from all angles. Globalisation has proven to be a double-edged sword providing opportunity as well as rivals from around the world. The perennial problem of high operational costs, especially rent and staff-related expenses remain a bane for small businesses. Office rentals reached a peak in 2015 after rising about 40% in 10 years, only abating less than 10% in the 2 years since then. Customers are also becoming harder to get a hold of. Greater access to information empowers customers to make the best or cheapest purchases, making it more difficult for SMEs to make a sale even if their product or service is superior. These empowered customers have more choices, more information and also more demands.

Overall, in the face of these challenges along with fears of a global slow down, SMEs are maintaining a brave front about the future. There is a general wave of confidence that 2018 will bring positive developments. A survey done by the Singapore Business Federation, indicated that services, manufacturing, trading and the construction industry showed the highest levels of confidence due to public sector construction works in the pipeline. Many companies also expected to expand their business within the year and have sanguine expectations of continued availability of financing options such as SME loans in Singapore.

Rising to the occasion with enough grit to make our pioneering forefathers beam with pride, several SMEs have, nevertheless, already beaten the odds to carve a niche in their respective fields. Aside from the usual measure of perseverance, foresight and creativity, these tenacious establishments had much more in them, allowing them stand out from the pack.

 

 

MM2 Asia

Since the halcyon heyday of local film studios like Shaw, Cathay Keris and the Malay Film PRoductions Ltd. of the 1940s through to the 1960s, local and even regional talent has been sidelined into obscurity. MM2, however, has made great strides in recent years to put Singapore back on movie-goers’ minds and fending off modern cinema stalwarts from Hollywood, Japan, Korea and China. Having the foresight to identify a gap in the film industry, MM2’s core business started in film production. Relentlessly producing content to the tune of almost 80 films in the decade leading up to 2018, they honed their craft and released favourites like the “Ah Boys to Men” series. By 2014, they were the first and only Singaporean film production company to list on the stock exchange (SGX). With this available financing, they diversified into upstream and downstream activities such as expanding their production capabilities into animation, as well as operating a string of cineplexes and even a foray into organising events. This approach has paid off, with revenue growing 73% and profits increasing by 127% since 2013.

 

 

The Watch Fund

Although Singapore has branded itself as a financial centre, there had not been an exotic investment of this breed until now. The brainchild of local watch aficionado, Dominic Khoo, the fund allows those who buy in with a minimum of a quarter of a million dollars to wear insanely valuable timepieces while potentially earning a return on the investment.

Investment grade watches are difficult to come by and unavailable to most. The founder spent many years building up a global network of contacts in the highly guarded industry by getting involved in watch publications, marketing and then in auctioning. This in turn led to the idea of starting an investment fund centered around watches. Its secret to success comes down to access. Firstly, investors are allowed to wear the time pieces that form the underlying asset of the fund and this is a strong inducement. Next, the founders have access to the products which otherwise lie behind high barriers to entry. The ability to procure items on first access, at lower prices, that are limited editions or provenance pieces is the key to obtaining watches that can yield a return when sold.

 

 

Chope

As Singapore’s other favourite pastime aside from watching movies and making money, we spend much of our time looking for that next delicious dinner. Combining new technology with the age-old love of food, Chope is the most successful in a slew of restaurant reservation booking platforms, attracting a funding round by venture capitalists in 2015 and 2017.

Starting in 2011, Chope was amongst the first movers to attempt to capitalise on the idea of making restaurant bookings online from a single platform. Since then many competitors have entered the scene and many have also thrown in the towel. In an interview, founder Arrif Ziaudeen cited tenacity, constantly building its network of restaurants and expansion into new markets as the reason for its success. Having aggressively extended its reach into markets like Shanghai, Hong Kong and Indonesia in its relentless search for new business, is the chief reason why international venture capital firm Square Peg Capital took notice of the hungry, growing start-up. It seems that equally ravenous patrons have not overlooked them too.

With the often quoted dismal survival rates of businesses in their first year and fifth-year milestones, running one seems like an uphill task. However, with some good old Singaporean perseverance and can-do spirit together with ingenuity and elbow grease, rewards can be reaped.

Together with government support initiatives and confidence in the economy expected to turn a corner, the next Adidas or Apple might just be around the corner. After all, these juggernauts all started from humble beginnings themselves – all part of the natural lifecycle of an enterprise.

Find out more about our SME loan package in Singapore. If you would like to find out more about how ETHOZ can assist you and your business, you can contact our friendly Relationship Managers at 6654 7799 or drop us an email at contactus@ethozgroup.com today!.

 

 

Is Singapore Ready for the Access Economy?

In the last three years, a slew of disruptive new services emerged suddenly and significantly altered how we interact with mature industries across several sectors. Its growth and reach rose in tandem with and because of the popularity of smartphones. All of a sudden, bicycles for use could be found almost everywhere, at almost any time. A private car to take you to where ever you want to go could be found waiting by the side of the kerb.  You could even have access to a villa along the Amalfi coast or cottage in the Taiga, all for a fraction of the actual cost. This new world order of consumption was called many things, including the Gig Economy, the P2P Economy, Collaborative Consumption and the Sharing Economy. However, it was most accurately encapsulated in the phrase, “access economy”, by Giana M. Eckhardt and Fleura Bardhi, both London-based professors of marketing in an article for the Harvard Business Review, in which they studied the development of apps that facilitated the exchange of goods and services on a barter basis or altruistism to a more sustainable model that was incentivised by monetary gain.

 

 

The Access Economy in a Nutshell

It is an enticing business model that allows a business start-up easy entry into a capital-intensive industry, with considerably less financing. It does this by effectively serving as a broker between the haves and have-nots and marketing the asset or service that has already been acquired beforehand by a third-party owner. By acting as a market maker that pairs those that own an asset with those looking to employ the asset, a winning proposition can be created for all parties; The asset owners earn a return by gaining access to a ready market without the risk involved in starting a traditional business, the business owner does not have to risk any seed money, and consumers are able to gain access at a considerably lower cost and with greater ease.

Today, cell phone-based applications facilitate a large proportion of activity in the access economy and these apps are ubiquitous; almost everyone has or at least knows of Uber, Grab and Deliveroo to name just a few. From the early years of 2013/2014, the access economy has seen tremendous growth in Singapore.

A study done by PricewaterhouseCoopers has pegged the industry size today at about US$15 billion (S$21 billion) and foresees that it will grow to US$335 billion by 2025. In comparison, China, the world’s largest access economy is worth in excess of US$500 billion. As personal devices connect more of the global population, the future of the world’s marketplaces shifting online.

 

 

Behaviour that Thwarts the Access Economy

However, as perfect as the arrangement seems, there are inefficiencies in this market. People, with their intrinsic nature to seek out maximum utility, are quick to exploit these to get more bang for their buck. This, not altogether uncommon, practice of self centered, self interested behaviour gives rise to a free-rider problem where, the collective participation in the provision of a good or a service maintains the critical mass to keep it viable, in spite of the free rider abusing it in a way that is detrimental to the provision of the same. An example close to home, are the many yellow bikes by the bicycle sharing company OFO, found in drains, stripped down, chained up for personal use or hogging them in many creative ways. It also manifests itself in other irksome habits such as spitting, littering, and lately sharing tables, taking colleagues’ food from the pantry, taking more pencils from IKEA than required, taking shopping trolleys home… the list goes on.

Although selfish behaviour is not unique to Singapore, the most identifiable trait that threatens to undermine our nascent access economy is Kiasu-ism. This characteristic compels one to extract more utility from a good or service or reserve its access at the exclusion of others. The mindset is more focused on how the individual receives more benefit than anyone else, than on how a community can benefit collectively. As such, the person who parks a shared bicycle where only he or she can find it, free rides on the service that only is made possible by the collective participation of the community to the service.

Unsurprisingly, Kiasu-ism is often linked to bad manners. Another lynchpin of the access economy is ride-sharing. With services like Lyft and Grab-hitch, travellers have more options for transportation. However, not all “Grab-hitchers” have noticed that the “hitch” in Grab-hitch stands for hitch hiking. This shifts the driver-rider dynamic to one where the driver is not just a paid chauffeur but is someone who has taken some time from his schedule to offer a ride. Consequently, many passengers exhibit an obnoxious attitude of superiority when using such services, despite paying fares much lower than with taxis. This has led to many guides on ride-sharing etiquette being published online to codify ride-sharing decorum.

 

 

A Change on the Horizon

“Selfish people are weak and are haunted by the fear of loss of control”, quoting published psychologist, M.Farouk Radwan, he explains why people are selfish. Singapore is often ranked amongst the most competitive countries globally and the most competitive in Asia. It is also a very new country built on its diversity as an immigrant nation, a demographic that it still maintains today; up to 25% of the population is made up of non-residents. Immigration is usually triggered by uncontrollable circumstances that are less favourable than the country one moves to. This compounds the sense of competitiveness and the fear of loss of control. This leads to a “dog-eat-dog” mentality where everyone fends for himself first and foremost. Over a long time, this is deeply ingrained, as part of the national culture. Change would take just as much time, and only with a willingness and concerted effort.

Initiating a cultural shift towards greater civic-mindedness, instilling positive social norms to give everyone a clear barometer of gracious behaviour or, at least establishing a way of monitoring bad behaviour will go a long way for the country to reap the rewards of the access economy.  To this end, there have been several steps taken by vendors and government alike. Ofo has responded to vandals and thieves of their bicycles by making an open call for users to help report bicycle abuse. Sites like STOMP have contributed to this informal system of community policing by providing vigilantes with a platform to report these inconsiderate acts. Aside from adopting a system of shaming and disincentives, rewards have also been adopted to reward positive behaviour.  oBike, another bicycle sharing company has implemented a structure that rewards or penalises users based on their behaviour. These measures augmented by government protection of the vendor’s’ property rights as well as consumer rights is a big step towards the country embracing the access economy and towards bringing about the promises of efficiency asset allocation by the access economy.

Until then, the mature, considerate culture that we all aspire toward will take some more time to take root. As the access economy is still in its infancy, the rules of engagement are not yet set in stone and until then, people will have to make up the rules as they go along. With the rapid expansion of this industry, we can only hope that the change will come sooner than later.

 

 

Your Handy Guide to Starting a Business in Singapore

Year after year, Singapore has established itself to be one of, if not the most, conducive business hub. The environment has surely driven many aspiring entrepreneurs and entrepreneurs alike to take that first bold step into the world of the business. Apart from having that impressive business plan, you’re going to have to check a few more items off your to-do list before your business can take off.

So this here is for the aspiring entrepreneurs who are have or are in the midst of devising that proverbial big thing to succeed.

 

 

1. Funding

In order to realise that proverbial big thing, or otherwise referred to as your business idea, you’re going to need capital. The good news is if you’ve already got the capital (be it from savings or from a bank loan), then you’re already one step ahead. However, if you don’t already have the capital and you’re thinking you can’t afford the interest rates of bank loans, here are more affordable ways to gather the funds you need:

 

 

Angel Investors

An angel investor is usually referred to an affluent individual who provides for a business start-up, usually in exchange for convertible debt or a share in the business. If you’re not for sharing the business with someone else, be rest assured that there are investors who don’t want a share in the company but are just looking to make a profitable investment. It’s equivalent to taking a loan from someone who’s intention is to help grow your business. Tap onto Singapore Angel Investors to connect with potential angel investors worldwide.

 

 

Crowdfunding

You’ve probably seen Facebook videos of businesses that started off on Kickstarter. Kickstarter is just one of the many crowdfunding platforms you can tap onto to gather funds for your business to commence. Crowdfunding leverages on the concept of persuading individuals to give you a small donation. Once you get thousands of donations, you’ll have some serious cash on hand. There are over 600 crowdfunding websites but these are the more popular ones: GoFundMe, Kickstarter, and Indiegogo.

Depending on the amount of money you need, you may use a combination of methods to acquire the funds. There’s no limitation that insists you can only tap onto one channel of gathering funds.

 

 

2.Deciding Your Business Structure (& Business Name)

Now that you’ve gotten the money to materialise your business plan, you’re going to have to decide on a business structure. This will provide a framework for your business to function under and more importantly, it’s going to affect how you name your business.

In a nutshell, there are 5 business structures: Sole Proprietorship, Partnership, Company, Limited Liability Partnership, Limited Partnership.

 

 

Sole Proprietorship

As a sole proprietor, you, and you alone, manage the company. Do note that you’ve to be at least 18 years of age to register a business under your own name. As the only owner of the company, you’ll have unlimited liability and are responsible for the debts and losses of the company.

 

 

Partnership

If you intend to start a business with another person or a group of friends, your business structure falls under that of a partnership. Under this structure, the business is governed by up to 20 persons with a view to profit. Similarly, all partners must be at least 18 years old and everyone has equal unlimited liability of the company.

 

 

Company

A company is a separate legal entity from its members and directors. That is to say, members have limited liability. There are 3 types of companies – Exempt Private Company (20 persons or less, and no corporation holds beneficial interest in the company’s shares), Private Company (50 persons or less), and Public Company (50 persons or more). As a company, at least one director has to be 18 years and above, and there should be at least one shareholder.

 

 

Limited Liability Partnership (LLP)

Just like a company, a limited liability partnership is a separate legal entity from its partners. While there is no maximum number of partners, the business must be minimally managed by 2 persons. In this case, all partners must be at least 18 and above. As a partner, you have limited liability and you are not held accountable for the debts and losses of the company incurred by another partner. Here, partners can either be individuals (of at least 18 years of age) or corporate bodies.

 

 

Limited Partnership

A partnership consists 2 or more persons, with at least one general partner and one limited partner. As a general partner, you have unlimited liability and you’re personally liable for the debts and losses of the limited partnership. But a limited partner has limited liability, and is not liable for the debts and obligations of the partnership beyond the amount of his agreed contribution. Again, there is no maximum number of partners and partners can either be individuals (of at least 18 years of age) or corporate bodies.

To find out more about these business structures, you may refer to Accounting and Corporate Regulatory Authority (ACRA).

 

 

3. Register Your Business

Now that you’ve gotten the funds for your business and decided on a business structure, which means you’ve probably also already decided on a name for your business, it’s time to make things official. As with all businesses in Singapore, you have to register your company via BizFile. BizFile falls under the care of ACRA – Singapore’s national regulator of business entities, amongst others. If you’re wondering if you need to register your business at all, as long as your business is defined as “activity carried out on a continual basis for the purpose of gain”, then you must abide by section 5 of the Business Registration Act.

 

 

4. Finding Premises

Working from home in comfy PJs sounds like an ideal office situation but it can spell trouble when you’re trying to meet deadlines. These cool co-working offices around town will surely send your productivity through the roof. Besides, with the rise of e-commerce, most businesses don’t require a permanent space. Even if you don’t need a storefront or a warehouse, you’d at least need a space to come together with your team for meetings and discussions. TheHoneyCombers recently put together a list of co-working space and I assure you they look pretty amazing.

In other news, if you’re joining the e-commerce bandwagon, be sure to register a domain. Refrain from domain name extensions, such as .info, .biz and others. They do not look professional and it’s not a good way to do business online these days. Only go for .com or a regional, country-related extension such as .sg.

 

 

5. Recruiting Manpower

Even if you’re the sole proprietor of the business, chances are you’re still going to need a reliable team to count on. (I’d advise against employing your friends as there might be a conflict of interest, and you might get caught in unforeseeable sticky situations.) In Singapore, job portals make recruiting candidates really convenient. Sites like jobsDB, JobsCentral, and JobStreet, allow employers to use the platform to advertise openings (at a cost, of course).

 

 

6. Start!

With all that in place, you’re good to go!

If you would like to find out more about how ETHOZ can assist you and your business, you can contact our friendly Relationship Managers at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

 

 

Negative Inflation in Singapore – Good or Bad?

Amidst the uncertainties of a polarised political environment and economic slowdown globally, the cost of living remains as relevant as ever for the man on the street. The rate of inflation is often used as an indicator of price levels and the general cost of living. Interestingly, Singapore experienced a record two year period of negative inflation from November 2014 to October 2016. This article takes a closer look at negative inflation and what its causes were. Is inflation – positive and negative — good or bad for the economy? Is negative inflation the same as deflation? Looking beyond inflation, what is a good gauge for whether we are better off in economic terms over time?

Inflation is Singapore is measured via the Consumer Price Index (CPI), which is compiled by the Department of Statistics and measures headline inflation. In 2015 and 2016, headline inflation came in at an average of -0.5% for each year. It finally bottomed out at 0% in November 2016. Continuing the turnaround, economic agencies expect inflation to pick up to between 0.5% and 1.5% in 2017. The last time Singapore’s headline inflation saw such a long period of contraction was from 1975 to 1977 – an agonising 16 months of declining prices in a global recession.

 

 

Drivers of Negative Inflation

Experts have attributed the spell of negative inflation to government intervention in the market and falling global commodity prices. Locally, the major drivers were declines in Singapore’s accommodation and private transport costs following the government’s introduction of cooling measures to the housing and motor vehicle markets in 2013. At the time, measures such as higher interest rates and tighter loan restrictions were introduced to stabilise prices and consumption patterns in these heated markets.

Economists note that the fall in global crude oil prices — 2014 saw oil prices drop 40% — led to a drop in the price of direct oil-related items in the CPI basket such as petrol and electricity.  Oil being an input to nearly all economic activity, it follows that a drop in oil prices would lead to a general decline in prices, contributing to negative inflation. Negative inflation has since turned around as oil prices rose from US$30 to $50 from January to December 2016 with early expectations of an improving global economy in 2017, and the initial impact of the government’s cooling measures tapering off.

 

 

Understanding Terminology – Headline Inflation, Core Inflation, Negative Inflation, and Deflation

It must be made clear that the fall in the CPI and negative inflation which made headlines refer to headline inflation which is a different measure to core inflation. It is thus important to understand: what the CPI constitutes; what the differences are between headline and core inflation; and what deflation is.

The CPI comprises a fixed basket of goods and services commonly purchased by households and measures their average price changes over time. The CPI basket contains about 6600 brands and varieties of consumption goods and services. It covers only consumption expenditure incurred by resident households and excludes non-consumption expenditure such as loan repayments, income taxes and purchase of assets.

In Singapore, the CPI typically refers to headline inflation. However, the headline number may not be the best measure of consumer demand on an everyday basis. Other measures of inflation can help better reflect price changes and understand the forces behind price pressures.

Core inflation, which reflects the price of daily necessities such as food, healthcare and education, and had actually continued to rise in the past two years, is a better indicator of price trends. Importantly, core inflation excludes the accommodation and private transport costs which are included in headline inflation. As opposed to negative headline inflation, core inflation actually rose about 1% in 2016, and is expected to be between 1% and 2% in 2017.

The spell of negative inflation Singapore experienced should also not be confused with deflation. According to former US Federal Reserve chairman Ben Bernanke deflation refers to: “a general decline in prices, with emphasis on the word “general”. Sector specific price declines are generally not a problem for the economy and do not constitute deflation”. Monetary Authority of Singapore (MAS) Managing Director Ravi Menon explained that Singapore was not facing deflation as price declines were “neither pervasive nor persistent”, exemplified by the rise in core inflation and the price of necessities in the spell of negative inflation. Price declines were mostly confined to the motor vehicle and property markets due to government intervention.

An economy experiencing deflation is Japan, which has been struggling to reverse price declines for 15 years. In a bid to stoke lending and spending, its central bank, the Bank of Japan, even set a negative interest rate of -0.1% on some deposits in January 2016.

 

 

Inflation and the ‘Goldilocks Principle’

While prolonged and pervasive price declines signal an economy in deflation, economists consider a certain level of positive inflation to reflect a healthy economy. A manageable level of inflation is desirable for its positive effects on profits, income levels and even debt. Just like Goldilocks’ porridge however, inflation cannot be too low or too high.

Falling or negative inflation levels could be a sign of a weak economy. As an economy slows down, consumers get nervous and spend less, be it on houses, cars, vacations or everyday necessities. This lack of demand places downward pressure on prices, shrinks profit margins, and leads to less job creation and falling wages, resulting in a vicious cycle that slows economic activity.

In contrast, rising inflation can have a positive effect on the economy. Rising prices add to profit margins and give companies added justification or incentive to increase the wages of their employees. This boosts morale, productivity and recruitment levels in the workforce, which has a positive knock-on effect for economic activity.

Inflation and rising wages also have a positive effect of debt, which most individuals take on in the form of education, housing or car loans. For instance, a mortgage benefits from inflation as it has the effect of eroding the real value of the debt amount over time. If one has a debt of $50 000 to be serviced over t a 25 year period, the real value of that $50 000 will shrink in proportion to rising wages over time. In contrast, deflation and falling wages increase the real value of debts over time.

Giving his perspective on the issue, Assistant Professor Woo Jun Jie from the School of Humanities and Social Sciences, NTU and Rajawali Fellow, Harvard Kennedy School said:  “While high inflation can result in higher costs to households and higher borrowing rates for businesses in instances where central banks decide to raise interest rates in response, overly-low inflation is often associated with slow growth. This is complicated by the fact that measures to counter inflation can be destabilizing, resulting in bubbles, irrational exuberance and excessively loose money (when central banks over-intervene), or worsening a slow-down (when central bank interventions are insufficient). Ensuring a healthy rate of inflation therefore involves a precarious balancing act by central banks.”

 

 

Managing Inflation in Singapore

To ensure inflation stays within a desirable range, the MAS, which oversees Singapore’s monetary policy, monitors and manages the inflation rate by adjusting the strength of the Singapore dollar. Thus, when inflation rises too much, the value of the Singapore dollar is allowed to appreciate to rein in the price rise, and vice versa.

In the current environment of subdued economic growth however, inflationary pressures have been mild. This actually prompted the MAS in April 2016 to ease its monetary policy stance by not allowing the Singapore dollar to appreciate in order to address a weakening growth outlook for a Singapore economy that is trade-dependent and needs a competitive currency for export demand. MAS explained that rather than a policy to depreciate the domestic currency, the change only removed the policy to effect a “modest and gradual appreciation path of the Singapore dollar nominal effective exchange rate”.

 

 

Looking beyond Inflation

As much as inflation is a useful indicator of the health of the economy, it is imperative that other indicators are also used to comprehensively gauge if one is better off. Drawing from the earlier mentioned relationship between inflation and wages, real income growth can be one such indicator as it goes beyond nominal income levels and takes into account the effects of inflation on purchasing power. Real income growth can be a better measure of how the cost of living and consumption patterns are changing for the man on the street.

According to the Ministry of Finance Singapore (MOF), real individual wages in Singapore have grown in the past decade. These changes have occurred across the spectrum of wage earners – from 2004 to 2014, the bottom 20% of workers enjoyed real wage growth of 14.8%, while the median group of workers saw 21.4% real wage growth. Compared to the first half of the decade (2004 to 2009), both groups also enjoyed faster real wage growth in the second half of the decade (2009 to 2014). These figures suggest that the man on the street has been better off economically in the last decade after taking price changes into account.

Real income growth should also be considered in the context of a household, which serves as the most meaningful social unit beyond an individual. To that end, real household income growth has seen broad-based growth in incomes over the last decade. For instance, the bottom 20% of households by income saw real income grow by 24.1%. Comparing real household income growth internationally, growth in Singapore has generally exceeded that of countries in the same league. Household income for both the median and bottom 20% of households was observed to have grown significantly faster than most developed countries and other Asian Newly Industrialised Economies (NIE), namely Hong Kong, South Korea and Taiwan.

The turnaround in negative inflation and rising real income growth aside, achieving sustained economic growth that is equitably distributed remains paramount. Assistant Professor Woo pointed out that this requires navigating a currently uncertain political and economic environment where the repercussions of a more insular US economy and slower growth in China are playing out. Other than evaluating cost of living indicators, the man on the street should also look to enhance his employability and productivity to ensure he can adapt to the challenges of rising competition and job restructuring brought on by technological disruptions.

 

 

Challenges in the Global Economic Landscape and Finding a Way Forward for Singapore

Continuing from our earlier article, “Examining Singapore’s Trade Links with the rest of the World”, in this article, we examine the challenges in the global economic landscape and finding a way forward for Singapore.

2016 has seen turbulence and uncertainty in the geopolitical and economic landscape with a wave of anti-globalisation and anti-free trade sentiment spurred by popular discontent. The influence of right-wing and populist politicians has spread across Europe and the US, exemplified by Brexit in June 2016, and the unexpected victory of Donald Trump in the US Presidential Elections in November 2016.

Geopolitical shifts are sweeping across the APAC (Asia Pacific) as China ascends as a political and economic power, while Singapore’s SEA (Southeast Asia) neighbours focus on economic development to better compete with Singapore. Singapore needs to negotiate these challenges with the pragmatism and clear-eyed realism that have thus far served it well.

 

 

Making America Great Again: At what Cost?

The Presidency of Trump has raised many  questions about the future role of the US in the APAC, including SEA, where ASEAN has fostered stability by maintaining good relations with the US and China. Current discussion centres on the implications of the US withdrawal from the TPP (Trans-Pacific Partnership).

The TPP is a major FTA comprising 12 Pacific nations including the US, Japan and Singapore, which together account for 40% of world trade. The agreement would only go into force if it is approved by six countries that account for at least 85% of the group’s economic output, which makes ratification by both the US and Japan, essential. Notably, China is not part of the TPP, which is viewed as a US-led agreement. Singapore PM Lee Hsien Loong has called the ratification of the TPP a “litmus test” of American credibility.

Consequently, there are question marks over the much-vaunted Asia Pacific ‘pivot’ that the Obama administration had initiated. In addition to the long-standing US military presence in the region, the TPP was to be an economic plank for the pivot.

There are concerns on the impact of a Trump Presidency to the US-Singapore relationship which marked its 50th anniversary this year. During his campaign, Trump had named Singapore as among the countries that were taking away American jobs in reference to Baxter Healthcare Corporation moving 199 jobs from the US to Singapore. That being said, campaign rhetoric should be distinguished from what Trump does once he is in office.

Largely, economic and political watchers expect the impact on bilateral relations to range from adverse to moderate. Under the banner of adverse impact, financial analysts have included Singapore as among the “most vulnerable” countries if the US adopts a more hostile trade policy. As a significant part of US investments in the region go through Singapore’s financial system, a lower volume of funds would impact its financial sector.

Among those who expect any negative impact to be moderate, Ambassador-at-Large Chan Heng Chee, who was previously Singapore’s Ambassador to the US, thinks that instead of being against globalisation, the Trump administration may push for what it considers “fairer trade” for US interests. Trump’s tough campaign rhetoric could be posturing as part of a negotiation strategy, something he takes pride in as a businessman. Economists also note the possibility of a silver lining should Trump adopt a more expansionary fiscal policy with increased government spending. This could provide more jobs and increase consumer expenditure in the US which would boost global exports.

 

 

Rise of the Middle Kingdom

China’s categorical rejection of the Permanent Court of Arbitration’s decision in July 2016 that its “historic claim” in the SCS (South China Sea) is invalid reflects China’s growing international stature. With the TPP in doubt, a successful RCEP (Regional Comprehensive Economic Partnership), perceived by many as China’s alternative to the TPP, could mean China expanding its economic orbit over SEA at the expense of the US. However, there could be consequences to Singapore and SEA’s strategy of hedging between the US and China, an approach which has been effective for peace and stability in the region.

There are other examples of China’s growth in the international order. In the 2014 APEC Summit that it hosted, China pushed for exploration of a FTAAP (Free Trade Area of the Asia Pacific) that could be an all-inclusive agreement spanning the APAC region and override separate agreements such as the TPP and RCEP.

China’s evolving priorities have inevitably meant bumps in the Singapore-China relationship. An ongoing issue has been Singapore’s position on the peaceful resolution of the SCS disputes according to international law that is in opposition to China which has refused to recognise the jurisdiction of the tribunal. Elements in China have expressed their displeasure with Singapore over this issue – China’s nationalist newspaper Global Times accused Singapore of attempting to table a SCS-related item at the 17th NAM (Non-Aligned Movement) Summit in Venezuela in September 2016, triggering a response from Singapore’s Ambassador to China to debunk the claim. China’s seizure of SAF Terrex Vehicles in Hong Kong in November 2016 for reasons officially yet undisclosed appears to follow a pattern of increased Chinese scrutiny of Singapore. Singapore will, as always, have to judiciously negotiate these challenges in what is ultimately a comprehensive relationship that is important to Singapore’s economic and strategic interests.

 

 

Southeast Asia: Competition Heats Up

Even as there been economic cooperation between Singapore and its ASEAN neighbours, the latter are also developing their own capabilities to better compete with Singapore. Singapore has long used the strategy of being a trading and business hub to outperform its neighbours. The development of SEA will increasingly see Singapore’s neighbours attempting to become hubs in their own right in direct and indirect competition with Singapore.

For example, Malaysia aims to compete with Singapore’s position as an oil trading hub by building two major petrochemical complexes in South Johor to capture spillover business from Singapore. Oil and gas, a key component of Singapore’s economy accounting for 5% of GDP, now faces stiff competition especially considering Malaysia’s comparative advantage in land resources and the global oil slump.

Malaysia is also collaborating with China to build a maritime network of ports between the two countries that would enhance trade, business and tourism, and give China greater access to SEA, a region of strategic importance to Beijing. The network is planned to comprise 10 Chinese ports and six Malaysian ones, including Malacca and Johor. China also plans to invest US$10 billion on a deep sea port in Malacca that could be the biggest in the region when completed in 2025. It would rival Singapore’s own plans to operate a mega port in Tuas from 2020 onwards.

 

 

Singapore after 50: The Next Lap

Moving forward amidst such challenges coupled with technological disruption, Singapore needs to make sure its externally-oriented economy is “future proof” against the complexities of the world. It needs to find new pathways for continued economic relevance and to push for greater free trade and connectivity.

The Singapore government’s efforts under the CFE (Committee on the Future Economy) encapsulate Singapore’s efforts to tackle oncoming challenges by developing economic strategies that ensure a vibrant and resilient economy over the long-term. True to Singapore’s free-trade stance, the initiative looks at areas including future connectivity of goods, services, capital, talent and information, and growth industries and markets for the future economy.

Asked for his views on the way forward for Singapore’s economy, Assistant Professor Woo Jun Jie from the School of Humanities and Social Sciences, Nanyang Technological University and Rajawali Fellow, Harvard Kennedy School said: “The development and maturation of SEA economies is inevitable, and this will likely drive the emergence of new financial centres or hubs for advanced producer services. Singapore’s strategy thus far has been to move up the value chain by developing new growth areas, particularly through its ‘Smart Nation initiative’. There is a belief that new services such as data analytics or ‘smart’ technologies can work towards enhancing existing strengths such as manufacturing or finance, and even ultimately grow to become growth industries in their own rights.”

The views shared by Assistant Professor Woo, is similar to what Singapore’s Deputy Prime Minister (DPM) Tharman Shanmugaratnam shared earlier this month at an international affairs conference titled “Has the game changed?”, organized by the Lee Kuan Yew School of Public Policy.  Addressing on cities left behind by globalisation, trade and technological trends, with new products and services replacing old ones, Tharman suggested the regeneration of people’s careers, not redistribution of incomes in societies – “You need redistribution in society, and you may need more in some areas, but it’s not at the heart of the matter… Redistribution doesn’t give hope. Regeneration is what brings hope because you allow individuals, communities and cities to rise through their own abilities” said Tharman.

In negotiating challenges to free trade, Singapore is sticking with the TPP for now while also being engaged on other fronts such as the RCEP, FTAAP, and trade-oriented initiatives such as China’s One Belt, One Road strategy and India’s Act East policy. Small state diplomacy is one of the tools Singapore uses to advance its interests as it engages larger trading partners. The 3G (Global Governance Group), an informal group of 30 small- and medium-sized United Nations member convened by Singapore, exemplifies collective small state diplomacy. In pushing for free trade, the 3G recently called on the G20 (Group of 20) economies to reaffirm their commitment to international trade, reduce barriers to trade and resist protectionism in all forms.

Summing up the strategic reality for Singapore, Assistant Professor Woo said that “In terms of diplomacy, Singapore will need to tread carefully. As a ‘price-taker’ in the world of global politics, Singapore has very little influence over the outcomes of regional and global political contestations. Nonetheless, it will need to live with these outcomes. Hence, the eventual dominance of any particular power over Asia Pacific, or even the world, is not something to be celebrated or rued over. Rather, it is to be strategically evaluated and parsed for potential economic and political costs and benefits to Singapore.”

 

 

Financing Solutions For Aspiring Business Owners

Whether you’ve been in business one week or five years, an infusion of money is always welcome. But what type of financing solution is best for your business? There are so many factors to consider – from the stage of your business to how much it’ll cost to get the money you need; just choosing a path to raise money can be overwhelming.

Here at ETHOZ, we provide a spectrum of equipment leasing and capital financing solutions, individually customised to suit our customers’ unique needs and requirements.  Our line-up of products and services are designed to help business owners improve cash flow flexibility, enhance financial budgeting and seize expansion opportunities.

 

1. Equipment Leasing

Enjoy all the profit-generating benefits and convenience of having your own equipment without the headaches of asset-ownership and depreciation.

 

2. Hire Purchase

With Hire Purchase, you can now spread out your payment over time to reduce your upfront costs while you enjoy the use and ownership of the asset.

 

3. Term Loans

ETHOZ Capital provides you an easy access to additional funds at competitive interest rates so that you can fully focus on growing your business.

  • Working Capital Loans
  • Debenture Loans
  • Shipping Loans
  • Renovation Loans
  • Property Mortgage Loans
  • IT loans (It is 0% interest here in ETHOZ).

 

4. SME Micro Loan Micro Loan Programme (MLP))

SME Micro Loan, previously known as MLP 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.

 

SME Micro Loan at a Glance:
  • Maximum Loan Quantum: S$100,000
  • Interest Rate (subject to participating financial institutions’ assessments of risks involved):
    • Minimum 5.50% interest rate for loan tenure of 4 years and below.
  • Eligibility
    • Company registered and operating in Singapore
    • ≤ 10 employees or has annual sales ≤ S$1m
    • At least 30% local shareholding
    • Company’s group annual sales of ≤ S$100m or company’s group employment size ≤ 200*

 

* Annual sales turnover and employment size will be computed on a group basis.  (i.e. All levels up for corporate shareholders holding > 50% of total shareholding of the applicant company and any subsequent corporate parents, and subsidiaries all levels down).

 

5. Local Enterprise Finance Scheme (LEFS)

LEFS is administered by SPRING Singapore is a SPRING-initiated project to assist and encourage the growth of locally-owned SMEs.

 

LEFS at a Glance:
  • Maximum Loan Quantum: S$15m
  • Interest Rate (subject to participating financial institutions’ assessments of risks involved):
    • Minimum 4.25% interest rate for loan tenure of 4 years and below
    • Minimum 4.75% interest rate for loan tenure of more than 4 years
  • Eligibility
    • Company registered and operating in Singapore
    • 30% local shareholding
    • Group annual sales ≤ S$100m or group employment size ≤ 200 workers^

 

^ Annual sales turnover and employment size will be computed on a group basis. (i.e. All levels up for corporate shareholders holding > 50% of total shareholding of the applicant company and any subsequent corporate parents, and subsidiaries all levels down.

If you would like to find out more about how ETHOZ can assist you and your business, you can contact our friendly Relationship Managers at 6654 7799 or drop us an email at contactus@ethozgroup.com today!