TYPES OF LOANS

 

 

It is common for any credit facilities extended to SMEs to be generically termed as an SME loan.  However, there are various types of credit facilities for different purposes to help SMEs better manage their working capital requirements as well as capital expansion like the purchase of a property or plant & equipment.  Below is a list of credit facilities offered by banks and financial institutions to SMEs.

Temporary Bridging Loan

TEMPORARY BRIDGING LOAN

  • Maximum quantum: Up to $5,000,000

  • Maximum repayment period: Up to 5 years

  • Security: Not required

  • Interest rates: Capped at 5% p.a.

  • Availability: Until 31 March 2021

  • Administered by: Enterprise Singapore

  • For more information on Temporary Bridging Loan, please click here

Packages on Shelves

WORKING CAPITAL LOAN

  • Maximum quantum: Up to $1,000,000

  • Maximum repayment period: Up to 5 years

  • Security: Not required

  • Interest rates from 1.30% p.a. flat

  • Administered by: Enterprise Singapore

  • For more information on Working Capital Loan, please click here

BUSINESS TERM LOAN

  • Maximum quantum: Up to $500,000

  • Maximum repayment period: Up to 5 years

  • Security: Not required

  • Interest rates from 4.84% p.a. flat

  • Available with most major banks and financial institutions

PROPERTY LOAN

  • Eligible borrowers: Both personal and corporate

  • Types of financing: New purchases, refinancing and equity cash out

  • Types of property: Residential, commercial and industrial

  • Interest rates: Fixed or floating

TRADE FINANCE

  • Eligible transactions for financing: Sales and purchases

  • Range of products including: Letter of credit, loan against trust receipt, invoice financing, shipping guarantee, etc

  • Facilities can be structured to support the operating cycle

  • Available with major banks and financial institutions

HIRE PURCHASE/EQUIPMENT LOAN

  • For purchase of plant and equipment

  • Up to 80% of financing possible for eligible plant and equipment

  • Available with major banks and financial institutions

FACTORING/INVOICE DISCOUNTING

  • Helps accelerate the conversion of receivables to cash

  • Advances of up to 80% of the value of receivables are possible

  • Several ways to structure how advances can be made

  • Rates depend on whether there is notification and assignment

REVOLVING SHORT TERM LOAN

  • Allows the borrower to draw a loan of up to a year

  • Both interest and principal are payable only at the end of the loan tenor

  • The loan can be drawn again upon repayment, i.e. the loan can be "revolved"

OVERDRAFT

  • Provides a credit limit on the borrower's bank account to allow it to be overdrawn

  • Useful for bridging short term cash shortfall

CROWDFUNDING

  • An alternative source of financing

  • Raise financing from the public via the crowdfunding platforms

  • Loans are usually unsecured

PRIVATE LOANS

  • Another alternative source of financing

  • Financing is usually short term of up to twelve month

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