Learn How SME Working Capital Loan Helps To Grow Your Business

The government’s SME Working Capital Loan can be used to improve and grow your business. Having enough working capital is crucial for daily operations, such as paying rent, employee salaries, and purchasing supplies.

All You Need to Know About Working Capital

Maintaining a healthy cash flow is essential for long-term profitability and success. A loan opportunity is a great way to ensure the stability and growth of your small or medium-sized enterprise. In addition to retained profits and fundraising, companies can also borrow money to cover expenses. However, it is essential to have a plan in place to repay any loans taken out. Additionally, some expenses, such as rent or salaries, occur regularly. It is important for businesses to properly budget and plan for these recurring costs.

In a recent update, the government expanded their SME Working Capital Loan programme to offer more flexibility for small businesses. Qualifying companies can now borrow up to $300,000 with a 5-year repayment plan, and there is no penalty for early repayment. The application process has also become simpler and can be completed online in just a few minutes without collateral. This change provides small businesses with additional funding options and the ability to take advantage of new market opportunities.

An Overview of Government-Assisted SME Working Capital Loan

The SME Working Capital Loan, supported by the government, can be used for various expenses such as payroll, equipment, software, and marketing. This loan has fewer restrictions than others, and the participating bank sets the interest rate. Seventeen financial institutions are currently offering this loan option.

To support small and medium-sized enterprises, the government will cover 50% (70% for businesses under five years old) of interest payments in the event of bankruptcy. This policy aims to alleviate financial strain on these companies and promote growth and stability within the economy.

  1. The Enterprise Financing Scheme, a government-assisted loan programme for small and medium businesses, requires four things for the application process:
  2. Financial documents, business plan, collateral, and eligibility proof
  3. Having these items ready before beginning the application can help streamline the process.
  4. It is important to note that eligibility requirements vary, so check with the EFS team before applying.

SME Working Capital- Eligibility Criteria

In order to assess your eligibility for a business loan, lenders often require the last six months of your bank statements. These documents show the cash flow in and out of your business account, including beginning and ending balances, deposits, withdrawals, and fees. Reviewing these statements, lenders can better understand how well you manage your finances.

The above information can be rephrased as: “Including financial statements such as a profit and loss statement, balance sheet, and cash flow projections, it is important to also consider any programme savings, rebates, or grants in your financial planning. Consider including the last six months of bank statements from your main account for a comprehensive overview of your finances. This information can help give a clear picture of your organisation’s financial standing.

The credit bureau statement shows a business’s directors’ history of loan repayment and current debt. This information can help determine the financial stability of the company. In considering a business loan, it is important to consider the personal income of any individual who has agreed to act as a personal guarantor. This information can be found in their personal Notice of Assessment.

Also Read: Are Digital Solutions Beneficial in Trade Finance?

The SME Working Capital Loan is available through the Enterprise Financing Scheme and has the same eligibility requirements for all financial institutions. This loan can help small and medium-sized businesses with their daily operating expenses. Your company may be eligible for specific government grants if it has been a Singaporean company for two years, has at least 30% Singaporean or PR shareholders, and has fewer than 200 employees or $100 million in annual sales. This applies to all levels of corporate ownership within the applicant company and its subsidiaries.

Final Words
The SME Working Capital Loan allows small and medium-sized businesses to borrow up to $300,000 from participating financial institutions. To apply, visit a participating financial institution and follow its application process. The institution determines the interest rates and loan eligibility. The above content discusses the various loan options available for small and medium-sized businesses, including temporary bridging loans, overseas loans, and financing for equipment and machinery. These options can provide flexibility and help cash flow during unexpected events or future investments.

The MSMEBlog provides expert solutions and guidance for financing small and medium-sized businesses. Visit for more information on MSME finance.

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