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Explore How SMEs in Singapore Can Use Business Loans for Working Capital Needs

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One of the most important aspects of the Singaporean economy is the presence of SMEs. It is also the foundation of Singapore’s economy, accounting for about half of the country’s gross domestic product, or GDP.

No wonder that the Singaporean government is actively involved in framing policies and other initiatives to promote the development and expansion of small and medium-sized enterprises. You need extra resources to grow your business and accomplish your objectives. Easy access to working capital on flexible terms will help your business. 

Most SMEs go for business loans to improve cash flow and maximise their business opportunities. With a business loan Singapore banks offer, like DBS, SMEs can meet their long-term financing or short-term capital needs.  

SMEs’ strong financial records can help expedite the approval process for their loans. In addition, companies raise money to capitalise on seasonality, prepare for shifts in the market, and stay ahead of the ups and downs of the economic cycle. Even though it may not seem necessary, there are several other reasons why asking for a business loan can be advantageous.

By using data more significantly, DBS Bank intends to better satisfy the unmet requirements of SMEs by providing suitable products and services.

Various Types of Business Loans for SMEs

Singapore’s SMEs are always looking for ways to grow, whether it’s expanding their operations or exploring new markets to stay competitive. If they have enough cash flow, they can expand their business. DBS offers business loans, and applying for and getting approved for one is an easy online procedure. To determine if your company is eligible for a loan, the bank will do a credit review. 

If a firm has consistent revenue and a predictable cash flow, it may be eligible for a company bank loan in Singapore. Private institutions may provide help to small firms that may not meet the requirements for government-backed loans. 

You can apply for a loan for working capital or a business loan up to SGD 500,000 if your company meets the requirements. The loan has a low-interest rate and a configurable payback period of between one and five years. 

  • Using an online application for business finance has several benefits. Among them are:
  • An intuitive application that makes it simple to view the loan request and important information
  • Easy online loan application process
  • Commence in February 2024 and receive an additional 18% in benefits on top of the 50% processing charge reduction.
  • It contributes to cost savings by requiring fewer interest payments.

Working capital loans

Small and medium-sized enterprises (SMEs) with up to 200 employees and a minimum group income of SGD 100 million are eligible for a business loan. The government of Singapore offers SME borrowers loans up to S$500,000 with repayment terms that vary between one and five years through agreements with banks.

ACRA-registered enterprises or limited liability partnerships with citizens or permanent residents owning thirty percent of the equity in the SMEs are required for SMEs to be eligible for a working capital loan in Singapore.

Services for Overdrafts 

A line of credit is available to SMEs continuously by the majority of private banks in Singapore via an overdraft facility. They can use this money, up to the predetermined credit limit, for operating expenses or business development. The following are some noteworthy features of DBS’s overdraft services:

  • Easier and faster loan application process
  • Quick and simple access to the required data
  • You can immediately access the funds in your company account.
  • You are only allowed to use the necessary amount, and you will be responsible for paying the interest. 

Purchase of Accounts Receivable 

A trade that alludes to the investment principle about a company’s accounts receivable is called an accounts receivable. Accounts receivable are assets that represent unpaid invoices that your consumers or clients have not yet paid. 

Accounts-receivable purchase loans have been more and more popular in recent years due to the use of cutting-edge technology by the accounts receivable platforms to provide you with the details of company accounts receivable. For a small and medium-sized business, accounts receivable finance is comparatively simpler than other firm funding options. 

These types of bank loans can help Singaporean SMEs meet their short-term cash needs.

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Cris Allouis