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Singapore Government-backed Loan

Singapore’s thriving economy has further cemented its position as the top-notch regional financial hub. Singaporean government has put all its economic efforts into attracting foreign direct investments (FDIs) and creating good investment climate in the country. Among these strategies, advantageous loans for foreign investors, tax incentives and exemptions, the pro-business legislation as well as the city’s financial stability, are the game changer that drive the economic growth in the country.
 

What is a business loan?

When talked about business loans available in Singapore, the government-backed loans always make the list. Offered through Participating Financial Institutions, the government-backed SME loans are ideal as the resources for working capital, equipment/factory financing and trade financing.
 
1. SME Micro Loans

Any local SMEs with 10 or less employees is eligible for micro loans of up to S$100,000. In order to help SMEs to access micro loans, SPRING Singapore takes the initiative to share the risk of loan defaults with Participating Financial Institutions in the event of company insolvency. In addition to this, SPRING has increased the risk-share for SME Micro Loans to companies that are less than 3 years old.

Eligibility:

  • It is a company registered and operating in Singapore.
  • Local shareholding = at least 30%
  • Annual sales figures recorded at S$1m or more than S$1m ; or having 10 or more than 10 employees
  • Group annual sales of S$100m or more than S$100m; or group employment size ≤ 200

 
2. SME Equipment and Factory Loans

This loan aims to financially help SMEs to purchase business equipment or selected factory properties under the Local Enterprise Finance Scheme (LEFS). All eligible companies can access financing of up to S$15 million to obtain equipment, machines or selected factory properties.

Eligibility:

  • It is a company registered and operating in Singapore.
  • Local shareholding= at least 30%
  • Group annual sales of S$100m or more than S$100m; or group employment size ≤ 200

 
3. SME Working Capital Loan

Launched on 1 June 2016, the SME Working Capital Loan aims to help local enterprises access unsecured working capital financing during the period of economic downturn. Companies can access unsecured working capital financing of up to S$300,000 through this programme until 31 May 2019.

Eligibility:

  • It is a company registered and operating in Singapore.
  • Local shareholding= at least 30%
  • Group annual sales of S$100m or more than S$100m; or group employment size ≤ 200

 
4. SME Venture Loan

Launched in January 2016 over a pilot period of two years, the Venture Loan aims to help innovative, high-growth SMEs to access alternate financing of up to S$5,000,000 for their business expansion.

Eligibility:

  • It is a company registered and operating in Singapore.
  • Local shareholding= at least 30%
  • Group annual sales of S$100m or more than S$100m; or group employment size ≤ 200

 
5. Loan Insurance Scheme (LIS) and LIS+

Aimed to help companies to secure trade finance loans from Participating Financial Institutions by insuring the institutions against insolvency risks of the company, the LIS is underwritten by commercial insurers and the Government supports a portion of the insurance premium. In addition to this, the scheme also comprises the Loan Insurance Scheme Plus (LIS+) underwritten by the Government for loans that are beyond the capacity of commercial insurers. Under this scheme, companies can access trade finance loans including inventory/stock financing, overseas working capital loans, factoring/accounts receivable discounting and Banker’s Guarantees for contractual fulfilment.

Eligibility:

  • It is a company registered and operating in Singapore.
  • Local shareholding= at least 30%
  • Group annual sales of S$100m or more than S$100m; or group employment size ≤ 200

 
6. Bridging Loan for Marine & Offshore Engineering (M&OE) companies

Under this scheme, companies in the M&OE sector are eligible to apply this working capital loans to help finance their operations from December 2016. The Bridging Loan provides access to working capital to help Singapore-based M&OE companies finance their operations and bridge short-term cash flow gaps (this loan is available for a year from December 2016).

Eligibility:

  • Local enterprises registered and operating in Singapore with a minimum of 30% local shareholding in the M&OE sector.

Sub-categories of Marine & Offshore Engineering:

  • Shipyards
  • Contractors to shipyards
  • Offshore services providers
  • Exploration & Production (E&P) companies
  • Oil and gas (O&G) equipment and services companies
  • Suppliers to O&G equipment and services companies

Doing business in Singapore has a multiplicity of benefit, not only in terms of returns, but also in terms of government-backed financial assistance. If you want to tap into the government-backed loans but not sure where to begin, feel free contact us for professional assistance.