Financing your business’s Working Capital
Are you a business owner who’s in dire need of help in funding your business?
You just came into the right place!
It pains when your business is financially struggling. And it’s more affected especially during this pandemic crisis.
It’s a real-deal problem that our team has seen during these hard times. Through this article, we ensure that business owners can find a way to help support their businesses.
It’s a fact that managing a business’s operations, especially in the financial aspect, is very tricky. It needs extra care and bold decisions to make.
Does your business currently facing difficulties in funding your operations?
If so, you might be thinking of applying for a business loan. It’s another way to support the financing of the business. This is what most business owners are doing.
If you are new to business loans, better know what it is and how it works.
This is to make you aware of what risks your business may carry along the way if you get a business loan.
What is a business loan, anyway?
The definition of a business loan is money lent by a financial institution to only use to fund business expenses.
The borrower will then repay the fund with interest by following the loan’s terms and conditions.
How will a business loan support my business?
You can use the borrowed money to help fund your business. To give you a clearer scenario, here are the most common reasons why business owners get such a loan:
If you see great potential growth in your business, you can invest to expand. But remember that it costs you money. That might include advertising costs, renovations, or an increase in staff, etc.
If you don’t want to eat your funds, you can apply for a business loan and use it to cover the expenses.
It’s important to invest in your products before customers can buy them. Afterward, you can offset your costs.
This will help meet the demands of your customers. At the same time, your business can offer better options.
But if you do not have enough cash to offset your inventory expenses, you can get a business loan. This way, it won’t affect the funds.
Your Business’ Cash Flow
Unsold inventories mean it was not converted into cash yet. And that affects the cash flow.
It would be a problem if you have regular operational costs. For example, inventory, staff, utilities, rent, and/or mortgages.
But with a short-term loan, you can stay away from difficulties. The business loan will cover your operational costs. At the same time especially when the business earns a low profit.
You can still bring in customers and earn revenue. Slowly, your business can make up for the losses.
Note: Lenders are evaluating the business’ history and financial status. It is to ensure if the business can pay for the loan or not.
In the case of Start-up businesses, they considered being “risky” businesses. They often get rejected in applying for traditional business loans.
Where can I apply for a business loan in Singapore?
It’s best to apply for a business loan from a trusted financial institution.
Several banks offer business loans. But these banks offer such financial services in different terms and conditions.
One of the best local banks in Singapore you must consider applying for business loans is UOB.
United Overseas Bank (UOB) has been part of the safest banks in Asia year 2019.
United Overseas Bank (UOB) Singapore
United Overseas Banks is in service for 80 years. And it is making its name stand-out in the financial industry.
The institution paved the way to become a leading bank in Asia. This is because of being innovative in financial products and providing genuine services.
UOB even received a series of accolades and awards in the industry. It is even known as the Best SME Bank in Asia. This proves the credibility of the financial institution.
UOB Business Loans Singapore
There are two schemes that you can apply under UOB Business Loans services. The Enhanced Working Capital Loan and the Temporary Bridging Loan schemes.
UOB offers these services which are under Enterprise Financing Schemes of Enterprise Singapore.
UOB Business Loan is only applicable to local businesses in Singapore. It’s an alternative way to support the business’s funds especially these pandemic times.
UOB Business Loans Schemes
Enhanced Working Capital and Temporary Bridging Loan Scheme
A business’s downfall is usually due to mismanagement. And that will have a big effect on business’ working capital resulting in a negative state.
To help aid this kind of scenario, you can apply to either the Enhanced Working Capital Scheme or Temporary Bridging Loan Scheme.
Under enhanced working capital, you can secure your financing up to $1 million. There’s no collateral required and you can repay the loan within five years.
The Temporary Bridging Loan scheme applies to all businesses. You don’t need to pledge any asset upon application. Plus, you can get a one-day response rate which can also be repaid in a fixed five-year term.
Eligibility for UOB Enhanced Working Capital and Temporary Bridging Loan
The following are the criteria before getting access to a business loan scheme:
- Local enterprises that are a: Sole Proprietor, Partnership or Private Limited Company
- The company must be at least three (3) years in business
- The local company must be registered and operating in Singapore.
- It should at least have a 30% local shareholding.
- The group’s annual sales of a local enterprise should be less than or equal to S$100m. Or it has a group employment size of less than or equal to 200. The computation for both annual sales and employment size is on a group basis.**
**Only applicable for SME Working Capital Loan Scheme
A Hassle-Free Application for UOB Business Loans
Save your time in applying for a UOB Business Loans with MyInfo Business!
All you need is your CorpPass and SingPass login credentials. This is only applicable to Singaporean and PR Business Owners, Partners, and Directors.
Frequently Asked Questions on UOB Business Loans
How can I reach UOB if I face problems with my business loan application?
You can reach UOB through their Help and Support System:
- You can call them through the business banking hotline: 6259 8188
- Request a Callback
- Go to Branch Online Services
How much will the monthly installments be?
UOB has a Loan Installment Calculator feature that a potential borrower can use. You can use it to find out how much will be your estimated monthly installments.
What is Enterprise Singapore?
Enterprise Singapore is a government agency. It works with reputable and committed companies to build capabilities, innovate, and internationalize.
Add to that, the agency supports Singapore’s hub for global trading and startups. It builds trust in Singapore’s products. And it provides services and continues to deliver it in absolute quality.
What is an Enterprise Financing Scheme?
Enterprise Financing Schemes (EFS) is under Enterprise Singapore. It covers six areas to help address the local enterprises’ financing needs:
- SME Working Capital Loan
- SME Fixed Assets Loan
- Venture Debt Loan
- Trade Loan
- Project Loan
- Mergers and Acquisitions Loan
Note: If a business can’t pay the debts owed to the bank under PFI***, Enterprise Singapore will share the loan default risk.
***Participating Financial Institution
Obstacles are real and it’s all part of nature. We can’t do anything about that. But we can control how we face and respond to difficulties that a business encounters.
Getting a business loan in UOB will help support the finances of your business.
But if you’re still in doubt and want to know more about SME financing solutions, you can speak to UOB’s SME loan specialists.
If you’re looking for a more flexible loan product to help finance your business, Cash Mart can help you. Cash Mart is a licensed moneylender in Singapore providing financial products and services in the country for years. No assets are needed to be pledged and expect a fast approval of your loan application.