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The Secret Sauce To Tide Through The Tough Singapore Economy – Be Future-Ready

The SBF-DP SME Index measures the sentiments of small and medium enterprises. After six straight years of optimism, the Index fell 1.1 points to 50.0 – the lowest score recorded since it was first published at the start of 2010, indicating that SMEs do not expect to achieve any growth during the next six months.

However, SMEs are showing resilience amidst the challenging environment with indicators on business expansion expectations and capital investment expectations showing marginal improvements and indicate that SMEs are positive in medium to long run.

And so as we move into a more challenging year ahead, it is more important than ever before that companies, regardless of which size or which trade you are in, look into improving processes or restructuring and be future ready.

With the announcement of Budget 2016 for SMEs, the government has put together measures that address near-term concerns while supporting firms to seize opportunities for productivity advancements and press on with restructuring.

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And to do this, you can tap on the financial support given by the government, administered through Participating Financial Institutes (PFI). For your easy reference, here are key government-assisted schemes distributed through PFI’s:

Loan Type Scope Collateral requirement Loan Amount Loan Tenure
SPRING Micro Loan Programme (MLP) Working capital for daily operations Collateral-free Up to S$100,000 Up to 4 years
Loan Insurance Scheme (LIS) Short-term trade financing with insurance subsidies from the government May require collateral No maximum quantum N.A.
SME Working Capital Loan (NEW! Pending details on release date) Working capital for daily operations Collateral-free Up to S$300,000 Up to 5 years

Another noteworthy source of funding is the DBS Business Capabilities Loan. If you have successfully applied for government grants, this unique solution is a bridging loan to cover expenses incurred prior to grant reimbursement from the respective schemes.

Loan Type Scope Collateral requirement Loan Amount Loan Tenure
Business Capabilities Loan (BCL)
– DBS exclusive
Bridging loan to finance your project expenses prior to govt. grant reimbursement. List of govt. grants applicable for BCL Collateral-free. Requires a copy of the ‘letter of offer’ for the government grant. Up to S$500,000 Up to 4 years

It’s also worth noting that DBS SME Banking is Singapore’s largest provider of micro-loans for young start-ups, micro and small enterprises since 2011. The bank receives an average of 1,800 micro-loans applications a year, which is more than 50% of all micro-loans applications supported by SPRING in Singapore.

KDY Holdings is one such SME which leveraged on DBS’ financing for working capital loan in the early stages of the company’s development. They are offering a niche service which is specialty chemicals marketing and distribution supporting the water treatment and oil and gas industries.

“Starting a business is not a bed of roses. Along with many challenges in our path of growth, we are grateful that DBS is there to support us through each stage of growth,” shared Ben Tan, General Manager of KDY Holdings.

“We see ourselves growing rapidly through DBS extending LIS line, Local Enterprise Finance Scheme (LEFS) Hire Purchase and LEFS Microloan. DBS listened to our needs and found the right solution to finance our operations when other banks could not. We are grateful for their professionalism, expertise, and great service! Now we know exactly who to call and enjoy doing business with a local bank that supports our financial needs as we continue to expand locally and beyond the shores.” added Ben.

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So what’s the easiest way to apply for a business loan? DBS has an online loan application service which supports application of up to 11 different loan products, including SME Micro Loan, Business Loan, Overdraft, Commercial & Industrial Property Loan, Corporate Credit Cards, and more.

The online application process is only 5 minutes, and there are no branch visits or signatures required. Processing is faster as you typically hear back from DBS within 1 business day. You will receive updates at critical stages via SMS and email (such as when your application is received or approved).

SME banking

Image Credit: DBS SME Banking website

To use this online service your business needs be a Singapore-registered company, and have a 30% or more shareholdings are held by Singaporeans or Singapore PRs (for government assisted schemes), with your company turnover below SGD10 million.

This article is done in collaboration with DBS.


 

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