Obtaining and managing capital is the key to starting a business. Irrespective of the size of your company, you need more money to expand it and increase your profits. Singapore is a sought-after location for business due to its vibrant economy, robust trade, good infrastructure, open policies, attractive investment atmosphere, and skilled workers. It also has access to business financing options.
This article will assist you in learning about startup business loan available in Singapore from public and private funding sources.
Programs or Grants Offered by the Government
To help startups grow their businesses in the initial stages, the government of Singapore offers several appealing funding schemes and grants. Here are some well-known schemes and startup equity financing plans:
Startup SG
The Singaporean government has established Startup SG to promote the expansion of creative startups, funded by the Standards, Productivity, and Innovation Board (SPRING). It is doing this as part of its initiatives to encourage the growth of innovative startups.
Startup SG provides Singapore-based startups access to funding and mentoring programmes to help them develop their business concepts into profitable enterprises. Startup SG Equity, Startup SG Tech, and Startup SG Founder provide grants, loans, and equity financing to Singaporean startups that meet the criteria.
Startup Business Loans
A smaller version of the typical business loan with a cap of SGD 100,000 is the starting pitcher company loan, also referred to as a “first business loan.”
Singapore business loans offer startups or small businesses loan ranges of at least S$100,000 at a lower interest rate to help them develop. It allows them to have enough cash reserves to carry out their daily operations.
Startup-oriented loans are helpful for microbusiness owners who need limited funding without expensive interest rates and payment terms. They are easier to get as they only require a short period of operation and do not require lengthy business records. Here is a list of Singaporean options for startup business loans.
Venture Debt Financing
It is a safe and secure, non-convertible loan offered by organizations like DBS to help a startup business. A business plan that works in conjunction with equity capital is venture debt financing.
- Reduce equity dilution: By obtaining a venture loan, your startup company can expand quickly without losing control of its ownership stake.
- Venture debt: This acts as a cover against high-interest rates, helping to lower the cost of financing and protecting your business from them.
- Increase growth: The business loan can be used to help you fund capital investments and company acquisitions.
For example, DBS’s venture debt funding of startups is helpful for:
- Increasing the returns on equity
- Little to no equity dilution
- enabling quick access to the DBS global network
- extending the runway for money
- collaborating with skilled entrepreneurs
Your company must have a viable business plan, equity financing of at least SGD 3 million from organisational investors, and the resilient backing of a DBS partner venture capitalist to qualify for this startup business loan.
Digital Business Loans
Financial institutions like DBS offer business credit to SMEs up to SGD 2 million with a 5-year repayment period. The online application process is simple, documentation is quick, and loans can be approved within a few hours. You can apply for a loan using the government’s resilience budget and pay only the interest during the first year.
SMEs have access to capital through startup business loans, so it is important to review your bank account, prepare an application, repay personal credit facilities, and keep options open when applying for the loan.
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