In recent times, Singapore has emerged as a strong financial hub of Asia. This has led to a surge of financial services and several Fintech companies opening their center in the country to try and capture as large a share as possible. While not every scheme has been a success, the start-up culture of the country has taught one important lesson – the small industry is the way forward, and the banking products need to be tailored to suit this need.
Banks have always been backing the giant corporates. However, when an economic slowdown strikes, these corporate giants are the ones that take the first fire, putting the bank’s exposure at risk. SMEs, on the other hand, pull all the strings, cut down on the expenses easily, minimize its exposure and handle the economic downfall in a much better way. Therefore, it makes a lot of sense for the banks and other financial institutes to focus a good amount of their energy onto the start-ups and small scale industry.
With this thought in mind, a lot of banks in Singapore have come up with specialized schemes and products aimed at the SME sector. These schemes promise easy terms for the SME companies and provide a window for flexibility and low interest and other penalties. If you are willing to start a business in Singapore, here are a few areas where the banking products will help to take first few steps in the country.
- Banking Support for New Businesses & Bootstrapped Start-ups
- Innovation & Technology
Banking Support for New Businesses & Bootstrapped Start-ups:
Account Opening: DBS Business Account targets at new start-ups for an instant account opening facility. It does not require any minimum balance to be maintained, no collaterals required, an initial deposit of $1000, no fall-below fee, free online banking, and debit card (in SG currency). With this facility, the Start-ups can instantly start running their business.
Financing Products for startup:
Start-up Business Loans: There are not many institutional lenders who offer financing facility to start-ups with not much business history. Hence, the government introduced loans and grants for start-ups like SME Micro Loan, Startup Business Loan, Initial Venture Funding, and Capability Development Grant.
SME Micro Loan is a financial assistance scheme for SMEs in Singapore. It is endorsed by the government and can be used by the businesses to maintain cash flow and carry out daily transactions. Enterprise Singapore facilitates up to $100K for small businesses by sharing risk exposure with participating banks and other financial institutions.
If you are looking for a highly customized banking solution, SME Venture Loan by OCBC is a great option. It has been designed keeping fast-growing companies at the center and presents its clients with facilities and products that help them in defining a clear road map ahead. The loan is as per Enterprise Singapore’s Venture Debt Program and promises up to $5 million for a tenure of up to 6 years.
The credit amount and the repayment tenure are good enough to allow growing start-ups in achieving their milestones earlier than planned, and possibly before their next equity raising round. The loan can also be used to:
- Venture into the Emerging Market Overseas
- Invest in Research & Development
- Increase Production
- Start with New Projects or acquire younger start-ups
Apart from innovative solutions for SMEs, OCBC Venture Loan also provides basic banking facilities like overdraft and a decent credit line. Click here to know about the documents required to apply for this loan.
Business Loan options available in Singapore for Start-ups:
Innovation & Technology:
Start-ups face a lot of problems, and hiring an expert for every problem is not a viable solution for any Start-up. This is where the TechMatch Program by DBS comes in. It is a mobile app that connects start-ups with industry experts and consultants who are ready with every kind of solution. The app allows the business owners to get insights into the core functional and operational areas of the industry and advice on how to survive the competition.
The initiative was undertaken by DBS in collaboration with government entities IPI Singapore and Infocomm Investments. The app has proven to be a success among the SME players who now use it to discuss their business problem areas, and get a deep dive into the solutions by the right consultants.
TechMatch has enabled SMEs to procure tangible and practical solutions at a fraction of the cost. Not just are the SMEs being helped, TechMatch has presented opportunities to tech and fin-tech companies who now have a new and high-quality channel to build a client base and emerge as a leading solution provider.
Singapore banking system is currently evolving and will see rapid change powered by technology and innovation. Blockchain technology, e-payment facilities are being introduced for the entire ecosystem to change, making it more efficient and productive.