Planning, dedication, hard work and a business loan Singapore are required for expanding or starting a business in Singapore. If you run out of awards and grants or if you donâ€™t have this option then, the best resource is business loans for many of the companies so that they can keep their businesses going.
A business loan is money borrowed from a financial institution for which a particular interest amount has to be paid. As a kind of measurement to ensure safety, interest is charged by lending companies. This is done, lest any borrower defaults on repaying the loan. The maneuver of taking a business loan is a risky affair especially if the business has not been faring well.
Internationalization Finance Scheme
In Singapore, IF or the Internationalization Finance Scheme is in place for business owners desirous of an overseas expansion as compared to a business providing economic spinoff within the country in the form of jobs, R & D – Research and Development, etc. Companies involved in trading should have a turnover exceeding 500 million Singapore dollars.
Companies not involved in trading must have less than 300 million Singapore dollars turnover. If for purchasing assets that will be used overseas, confirmed orders are received for sale overseas, or capital is raised for secured projects overseas, or a bankerâ€™s guarantee is issued for projects overseas that have been secured, then the IF scheme is used. The lending institution considers the terms of loan, requirements and rate of interest of collateral in consideration.
Local Enterprise Finance Scheme
Also available is the LEFS or the Local Enterprise Finance Scheme. This scheme is aimed at medium and small sized business enterprises. If your company has less than two hundred staff and sales turnover per year is less than one hundred million Singapore dollars and has local shareholding anywhere between 30% and 100%, then a LEFC scheme can be considered.
Equipment and factories can be upgraded, automated or purchased by the 15 million Singapore dollars obtained from LEFS. JTC Corporation properties or HDB or the Housing & Development Board sites are the kind of factory purchases that can be made. Approximately 4.75% rate of interest is charged for loans to repay within 48 monthsâ€™ time. Around 5.25% interest rate is charged for businesses that take more than four years to repay LEFS.
Micro Loan and Moneylenders with License
Also available is the Micro Loan Program for business owners requiring up to 100,000 Singapore dollars to purchase, or automate or upgrade factories and equipment. If the incorporated or registered company has less than ten staff and turnover is less than one million Singapore dollars, then it qualifies for a Micro Loan. Personal Income loan Interest rate charged is around 5.75% at a minimum on the working capital loan funding. If there is difficulty in securing a bank loan then you licensed moneylenders are also available in Singapore.
To stay afloat, a business loan proves to be beneficial, but the difficulty lies in repaying it. Securing a business loan in case you are in debt can be quite problematic. If credit rating is poor then rate of interest to be paid will be higher on securing the loan. Business loans come in various types. In Singapore, Business loan Singapore options depend upon the funding required and the company size.
by Smarty RockyTags: lefs, local enterprise finance scheme, safety interest, sales turnover, singapore dollars