Not having enough working capital may lead to the failure of several small and medium-sized enterprises (SMEs) for their inability to meet upcoming expenses. SMEs are generally aware of the amount of cash they will require to run their operations every day. Running a business successfully depends on the availability of liquid assets for daily operations.
Your company needs adequate funding to cover regular costs like office supplies, rent, wages and salaries, utilities, advertising, business trips, and depreciation. Other than the operational costs, you should also make a provision to meet non-operating costs, which include inventory charges; restructuring costs; and interest on bonds, convertible debt, and bank loans.
Businesses, particularly small ones, suffer serious cash-flow problems, which they can resolve with a working capital loan. Besides covering their basic operating expenses, businesses use working capital financing to expand their operations or start new ventures.
SMEs can get working capital loans from DBS are available to SMEs to increase cash flow, make the most of new business ideas, and deal with erratic seasonal sales. A working capital loan Singapore banks offer for SMEs is provided in different ways:
- SME Working Capital Loan
With this government-assisted financing scheme, you can meet your operational cash-flow needs. Some significant features of this SME working capital loan are:
- A borrower can avail of a maximum loan amount of SGD 5,00,000. However, it is based on the bank’s credit evaluation.
- The loan can be repaid within 5 years.
- If you apply for a loan now and until August 31, 2023, you will get 50 per cent off the processing fees, which will help you save up to SGD 3,750.
- The interest charged depends on the bank’s evaluation of the risks involved.
- Quick and simple online application procedure, fetching necessary information from MyInfo Business or ACRA
- Business enterprises registered and running their operations in Singapore, which include ACRA-registered partnerships, limited liability partnerships, sole proprietorships, and companies.
- A participating financial institution like DBS Bank has to evaluate and approve the loan.
- The borrowing company should have a minimum of 30 per cent local stocks held by Singapore Permanent Residents or Singaporeans either directly or indirectly.
- An SME is deemed to have met the criteria for availing of “SME Working Capital” if its Group Annual Revenue is equal to or less than SGD 100 million or its group employment size is equal to or less than 200.
How Do I Apply for a Working Capital Loan in Singapore?
- Log into the particular institution’s website, for instance, DBS, and click on the “Apply for SME loan” tab. Fill in the necessary details by going to MyInfo Business or ACRA.
- You may have to submit the last two-year financial statements and three-month bank statements if DBS is not your operating bank.
- Have your guarantors ready to endorse the application
- Know the status of your loan application online. You can use the business banking app, DBS IDEAL for the details.
- On the acceptance of your loan application, the bank will give you an offer.
- With the assistance of a relationship manager, you may accept the offer offline or online.
- Once the funds are transferred to your DBS business account, the bank will send a notification to you.
Other than the SME Working Capital Loan in Singapore, you can get SME Fixed Assets Financing, Project Loan, Enterprise Financing Scheme Trade Loan (EFS-TL), and Venture Debt Loan under government-assisted schemes.