How To Expand Small Businesses With SME Loan In Singapore?

Small businesses need capital to expand themselves. To meet their financial requirements, various banking and non-banking institutes offer an SME loan under certain terms and conditions. ,

SME owners apply for a business loan for either of the two primary reasons - needing capital to run a business, or looking for funds to expand a business. 

What do you mean by SME Loan?

SME stands for Small and Medium Enterprises. Singapore's 65% economy comprises SMEs. While running these businesses, several financial institutions offer funds or capital, and one such is known as an SME business loan. 

Why do SMEs look for business loans?

SME loan fulfills your dream of starting and expanding a business. During your business lifecycle, a stage comes when you need funds to scale up your operation, and your plans are not working well. These funds support you financially and help in expanding your business with additional resources.

These loans are different from business loans offered by banks. As they have credit options specially crafted for small businesses. SME loans are available for small to medium scale businesses, whereas, a business loan is for larger and well-established businesses.

SMEs takes up loan for the following purposes:

  1. To accelerate business growth and expansion: like taking your SMEs to a new market, creating a cashback platform, change in the type of service or product, etc.

  2. These loans help you to withstand competitors and have resources available in hand. To expand a business and owner needs opportunities, and SME loans provide the advantage of business opportunities.

  3. Several SMEs require lots of equipment and inventory. To fulfill their financial need, these loans are available.

  4. While running a business one may face an out-of-cash flow issue, SME loans help owners to overcome such hurdles.

Benefits of SME Loans

  1. Affordable business loans: They have a variety of repayment options, and the loan amount may range from Rs. 5 lakh to Rs 5 crore. 

  2. No Collaterals: These loans don't require collateral, as they are unsecured loans. As an owner, you don't need to produce property papers, or mortgage business equipment against the loan amount.

  3. Minimum Documentation: SME banking accepts a simple application process with minimum documentation, and gets approved within a short period. 

  4. Low processing fee and interest rates: The processing fee and the interest rate vary from lender to lender. Make research, and apply for the one with the lowest processing fee. The interest rate depends on the type of loan and the financial institutions. Generally, it ranges from 8.40% - 24% every year. 

  5. No Prepayment charges: Prepayment charges get waived off on most of the SME loans, for early loan closure. This means if you can repay your loan amount in full before the completion of your repayment. You can save on the interest payment and no extra payment for early closure.

While applying for these loans, Aspire verifies the following:

  • Details of your bank account

  • Verification of your existing loans

  • Basic proof of your business like registration certificate, documents related to the establishment of the business, guarantee letters from directors, partners or promoters, etc.

  • Income tax return file copy

  • Sales tax return file copy

  • License copy, if any.

An SME loan may vary from person to person, as one shoe cannot fit all. Aspire helps you to identify your needs and draw down solutions to meet your financial crisis by considering your pockets.
Location: Singapore

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