6 SME Loans under My Umbrella

The Enterprise Financing Scheme (EFS) is a scheme created by the Singapore government to aid SME in their daily operation and cash flow related issues. There are 9 SME Micro Loan Singaporefinancial institutions that provide these microloans with different credit requirements and interest rates. They are DBS Bank, IFS Capital, OCBC, Ethoz Capital, Maybank, RHB, Hong Leong Finance, Orix Leasing, and UOB. From 29 October 2019, the EFS effectively becomes an umbrella scheme that ensures Singaporean SMEs receive the necessary funding through loans. This implementation by the Singapore government can help SMEs in the different growth phases of the business.

We will elaborate on the purpose and classify each loan by the amount of eligibility per borrower or group and the maximum repayment period. The risk shared by the Singapore Government assumes responsibility up to 50% of loan default risk along with the chosen financial institution. This shared responsibility will be increased to 70% for early startups and young SMEs. This occurs when the company is unable to repay the loan or becomes bankrupt. The interest rates are subjected to the chosen financial institution risk assessment of the SME.

Under the EFS, there are six types of loans that apply to different needs in multiple industries. 

  • SME Working Capital Loan

Purpose: To finance day to day operational cost and cash flow issues.

Amount: $300K per Borrower

Maximum Repayment Period: 5 Years

  • SME Fixed Asset Loan

Purpose: To finance investment cost incurred by both local and foreign fixed assets such as equipment, machinery and upgrading cost. This also includes the cost from construction, business properties, purchase of government and commercial factories.

Amount: $30M per Borrower Group

Maximum Repayment Period: 15 Years

  • Venture Debt Loan

Purpose: To finance the growth of creative SMEs. This loan is suitable for high growth young SMEs that lack notable assets that are used as collateral under traditional bank loans. This loan can be used for SME expansion, development of other product lines, tender for new projects and undergo mergers and acquisitions.

Amount: $5M per Borrower Group

Maximum Repayment Period: 5 Years

  • Trade Loan

Purpose: To finance importing, exporting and guarantee needs. These include replenishing inventory and stock, pre-delivery working capital and foreign working capital loans.

Amount: $5M per Borrower Group

Maximum Repayment Period: 1 Year

  • Project Loan

Purpose: To finance the completion of guaranteed foreign projects such as working capital and trade loans, equipment, machinery, vessels, and related fixed assets.

Amount: $50M per Borrower Group

Maximum Repayment Period: 15 Years

  • Mergers & Acquisitions Loan

Purpose: To finance relevant acquisition such as domestic or foreign target companies to internalise them.

Amount: $50M per Borrower Group

Maximum Repayment Period: 5 Years

Hence, under this streamline umbrella scheme, the EFS covers a wide range of purposes and relating industries. This is an extensive initiative by the government to provide the necessary relief to business owners of SMEs. Now that you have a better understanding of the loans, you can make an informed decision to benefit your business and grow as an SME in Singapore.

Taking A Micro Loan From A Licensed Moneylender

If your business is not eligible for the loan scheme by the Singapore government, you may consider getting a SME Micro Loan Singapore from a licensed moneylender.

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