What are the available financial assistance schemes offered to SMEs and how does a company qualify for them?
Government Assistance Schemes, currently available are the Local Enterprise Finance Scheme (LEFS), Micro Loan Program, Loan Insurance Scheme (LIS), and Internationalisation Finance Scheme (IFS).
* For the Micro Loan Program, the applicant must employ not more than 10 workers (or not more than 200 if it is in the service industry).
For more information on government assistance programs, please contact the EnterpriseOne hotline at (65) 6898 1800 or e-mail email@example.com.
How does my company apply for a credit facility with the bank?
You may call a bank or visit any branch. Customer service officers would be able to assist you with the credit application process, which may vary from bank to bank. In most cases, the bank will require you to submit the following documents for processing:
- Application Form (if any)
- Notice of Income Tax Assessment of key promoter/director(s) (latest two years)
- Financial Statements (latest two years, with at least one year audited for Private Limited Companies)
- Other bank statements (latest three months)
- Personal account statements for sole proprietor/partners (latest three months)
- Business Plan (for startups only)
- Memorandum & Articles of Association for private limited company
- Profile of the promoter/sponsor/director(s)
On occasion, the bank may require you to meet with their representative in person.
What documents do I need to present to the bank when I require credit facilities? How much do I need to tell the bank?
Banks will generally ask for a current copy of your audited financial statements and latest management accounts, bank statements and business plans. These will give them a better understanding of your business needs and financial strength. You should be open in sharing your plans and commitments so that the bank can help you structure appropriate facilities.
What basic criteria does my company need to satisfy in order to obtain banking facilities?
Depending on its credit policies and requirements, a bank typically evaluates the applicant based on the following criteria:
- Business Plans/Cash flow projections
- Positive networth (typically comprising paid-up capital and accumulated profit/loss) which should be commensurate with the nature of the business
- Ability to service monthly installments or financial obligations
- Satisfactory conduct of operating bank account/s
- Background information on the applicant/promoters and personal guarantors.