If you operate an SME in Singapore, you will almost certainly need business funding at some time. Business loans in Singapore may be used to grow your company, bridge cash flow shortages, fund inventory purchases, and rent or buy commercial property. There are different types of loans available to support small-medium enterprises. However, not all of them are required and needed. Therefore, in this blog, we will explain the different types of loans an SME can look for.
Types of loans available for SMEs in Singapore
● Working capital loan
The working capital loan is a government-assisted business loan scheme. A working capital loan is only available for small-medium enterprises. Under this loan, an SME can ask for a max of S$1 million, not to mention, that the financial institution will check all the financial records in detail. If you are looking for a short term loan Singapore based company, then you need to check the Ethozgroup website.
● Business Overdraft
Business overdrafts are often looked at as an alternative to business term loans and long term loan Singapore. These are short term loans and are often called unsecured overdrafts. Instead of a flat sum payment, an OD facility gives the SME a line of credit. Only the amount that has been utilized is subject to interest.
● Business Term Loan
Unsecured business term loans are backed by the personal guarantees of company directors rather than tangible security such as property or equipment. Because of their flexibility, these loans are appealing to SMEs. They can be used to support day-to-day operations like inventory purchases and salaries, as well as company development plans like leasing a new retail location. There are many business term loan Singapore based financial institutions that provide the Business term loan facility.
● Equity term loan
It is the same loan that is referred to by the terms term loan, equity term loan, and home equity loan. When you take out a term loan, you use the equity in your home as security. You may be able to borrow money from your home equity if the value of your home has increased over time. However, this type of loan is rarely used in businesses, and there are very few equity term loan Singapore institutions that provide term loan Singapore.
To conclude
These are just some of the available options, there are many more. But, not all of them are required for your SME. Therefore it is better to consult a legal expert to understand more. You can visit the Ethozgroup website to learn more about loans.
