How Do SME Loans Work And Should I Get One As A Business-Owner? - Singapore News

Business loan designed for startups and fledgling businesses less than 2 years old.Instalment loan catered for business expenses and growth.Borrow up to 90% of invoice pledged over 30 to 120 days.Pay interest or charges only on credit used.SME Working Capital Loan is a government-assisted business funding loan that is offered through all major banks in Singapore.

To qualify, SMEs should have been in operation for six months to two years. The typical loan tenure is from one to four years, with interest rates ranging from 10% to 13% per annum.A type of SME loan designed for more mature businesses. This loan provides a lump-sum loan that is repaid in regular instalments throughout the duration of the loan.

A business can use the invoices that are awaiting settlement from clients to receive an advance. When the client makes a payment, the SME can then repay the advance taken from the lender, along with the interest charged on the advance. In recent years, newer online finance providers have begun to offer lines of credit as well, albeit with slightly different structures. Notably, such lenders implement a fixed tenure on your loan, but in exchange, charge lower fees or interest.SME loans are reserved for businesses registered and operating in Singapore only. In most cases, there is a minimum local shareholding of 30%, ensuring the needs of Singaporean SMEs are prioritised.

Businesses are not required to put up collateral when applying for SME loans, which are offered unsecured. However, some lenders also provide secured business loans, allowing applicants to pledge business assets or collateral to secure their loans for lower interest rates.Funding Societies was founded in 2015 to meet the financing gap of local SMEs. The lending platform offers a variety of loans and finance options catered to small businesses, with a mix of short-term and long-term solutions.

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How do SME loans work and should I get one as a business owner?SME loans are business loans that cater to the funding needs of small and medium business enterprises. There are a variety of SME loans available, with different features, structures and terms that make them well-suited to a variety of situations. Let's take a look at how SME loans work, who offers them, and what business owners should consider before applying...
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