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.
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.
• 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
• 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.