Small and Medium Enterprises (SMEs) in Singapore today have numerous ways to get funds to make their business grow as there many banks and financial institutions who are coming forward to help them. However, before getting financial backing from banks, SMEs must first assess their financial condition before determining whether they really need additional funds.
If you apply for the wrong loan, it might have a negative impact on your business and affect its financial strength. For example, if you opt for a short-term loan for a project that is expected to go on for a considerable amount of time, you are likely to run into needless cash flow issues. It is vital that you be very clear about your goals and what your intentions are with an SME loan.
UOB offers numerous SME loans that you can use to make your business grow. The eligibility criteria and requirements are not stringent and the application process is also convenient and without any major hassles.
UOB offers numerous business loans that fulfil the requirements of small businesses that need more choice in terms of the loan amount and interest rates offered, access to funds, and more. With the business loans offered by UOB, you can get a loan amount of up to S$550,000 without having to submit any collateral.
Sign up for any eligible UOB Business Loan and get the chance to win two Singapore Airlines tickets to Tokyo, Club Med stay in the Maldives, Tong Le Private Dining for 10 persons, and more through a lucky draw with a total prize money of up to S$27,000. However, this is a limited period offer and will be applicable only until 31 December 2018. This offer is not applicable to all types of business loans, so before you apply do make sure to check with the bank. The various business loans offered by UOB are as follows:
To help you manage your cash flow properly, you can opt for UOB’s Working Capital Financing as it is the right tool for you to get standby credit. With this facility, you will have easy access to additional funds as and when the need arises, giving you the freedom to act on those prospects. In addition, you will not be charged anything extra and you will pay interest only on the amount used. This facility will help you with your business’ changing financial situation. All businesses registered in Singapore are qualified to apply for Working Capital Financing facility. With this loan, you will get an amount of up to S$300,000, with a monthly repayment period of up to five years.
UOB offers the SME Micro Loan to assist small organisations registered in Singapore get access to funds so that they can fulfil their working capital requirements, buy equipment. This loan is offered as part of the Local Enterprise Finance Scheme (LEFS). You can get this loan for a tenure of up to four years. Under this scheme, the maximum amount that you can get is S$100,000 per enterprise.
In general, this is based on the enterprise's total exposure to the microloan of not more than S$100,000 across all financial institutions. If your business has an existing microloan of S$100,000 with any of the registered financial institutions, you will not be qualified for the UOB SME Micro Loan scheme. There are two types of financing facilities available under this scheme, SME Micro Loan – Term Loan and SME Micro Loan – Hire Purchase. You will be eligible for this loan only if you employ ten people or less/ annual sales do not exceed S$1 million. Also, at least 30% of the shares must be with local shareholders. In addition, the entire group’s annual sales should not be more than S$100 million/ the group must not employ more than 200 people.
The Loan Insurance Scheme offered by UOB provides another way for businesses to access funds for through loan insurance with an added benefit of reduced trade risks. As part of this insurance scheme, the bank helps local businesses get suitable loan facilities to fulfil their expansion and working capital needs. Half of the premium will be sustained by Enterprise Singapore and the risk involved is co-shared with 75% of the risk borne by insurers.
For every application, the insurance premium is ascertained by the insurer on the basis of the borrower’s profile. This loan facility is available for both overseas and domestic trade facilities. With Loan Insurance Scheme + (LIS+), an insurance premium of 1.5% will be charged for the sum insured by IE Singapore and SPRING Singapore.
Under this scheme, there are five different financing facilities as shown in the table below:
|Type of Loan||Maximum Amount Financed||Maximum Repayment Period|
|Overseas working capital loans support facilities via standby letter of credit||Credit facilities made by UOB through its inter-branch cover letter or support facilities through a standby letter of credit up to 100% of the SBLC|
|Banker's guarantee(tied to project financing)||Up to 100% of banker's guarantee value|
|Accounts receivable financing facility||Up to 100% of invoice value|
|Structured pre-delivery working capital facility||Confirmed sales order or up to 100% of letters of credit received|
|Inventory/stock financing facility||Up to 100% of the purchase price||1 year|
With the UOB SME Equipment Loan, you will get the funds to purchase new equipment for your business or to upgrade your existing equipment. The tenure for this loan will change based on your requirements and may go up to eight years. The minimum interest applied for a loan tenure of more than four years will be 4.75% p.a. while it is 4.25% for a loan tenure of four years or less. You will get funds of up to 90% of the purchase price or market valuation of your new equipment.
If you have to make use of heavy machinery and commercial vehicles for your business and you are short on funds, you can apply for UOB Commercial Vehicle and Machinery Financing.
If you wish to purchase heavy machinery, you will get up to 80% of the purchase price or market valuation of the machinery. You can pay the instalments over a period of five years. Get the ownership of the asset when you pay the entire loan amount. You can make use of the Government Assistance Scheme which you can obtain via the Local Enterprise Finance Scheme.
Commercial Vehicle Financing
With this scheme, you will get financing of up to 100% of the purchase price or market valuation of the new vehicle. You can pay the loan amount in instalments over a period of up to seven years. You will get the ownership of the asset when you pay the entire loan amount. Also, there is an option of hire purchase financing for commercial automobiles and commercial automobiles with renewed COE.
On the official UOB webpage of Commercial Vehicle/Hire Purchase Loan, you will also find a calculator that will help you find out how much you will get and the monthly instalment you will have to pay based on the purchase price of the commercial vehicle, down payment, loan tenure, and the interest rate applied.
Here’s how the calculator can help you. Let us assume the purchase price of the vehicle is S$80,000, you are paying a down payment of S$8,000 and the loan tenure is one year with an Effective Interest Rate of 6.03% p.a. The monthly instalment will be S$6,167. The example here is just an illustration and the figure may change based on the bank’s discretion.
If your business is expanding fast and you require more space to set up your office, you can make use of the UOB Business Property Loan and Equity Loan and get an approval in one day. With this loan, SMEs can improve business cash flow with a cash-out option through your business property.
If you are opting for loan refinancing, you will get up to 100% of your property value and use it to cash out as a drawn-out loan. You can also leverage your present commercial property as equity collateral to get additional funds for your business requirements.
If you are setting up your business for the first time you will get up to 90% of the purchase price or property value for your mortgage and you will have the choice of exercising your refinance option with competitive interest rates.
To find out your monthly instalments, you can use UOB’s Business Property Loan Affordability Calculator. UOB also offers a Buy vs Rent Calculator to demonstrate the likely cost of buying a property, in comparison to renting. The results you get by using the calculator can be used to assess the options you have to reduce your business cost.
With BizMoney you will get a loan amount of up to S$350,000 to enhance your working capital. You will get up to four years to repay the amount with this loan. You will not have to pledge any assets or deposit as guarantees if you wish to apply for this loan. However, you may have to submit a personal guarantee. The whole process of application is hassle-free as you will have to submit only a few documents and once you apply for this loan, you will get a response from UOB within 24 hours.
The table below shows the interest rate applicable and other fees and charges associated with BizMoney:
|Annual Fee||Interest Rate||Facility Rate|
|S$500 per year||10.88% p.a.^||2% of the approved loan amount|
^ The annual interest rate is 2.88% ("Margin") over the bank's present Business Board Rate which is currently 8% p.a.
With UOB Overdraft, you will get access to additional funds whenever you need them. Some of the other benefits associated with this loan facility include flexibility of linking it to UOB USD or SGD Current Account, you will have no worries about mounting business expenses, and there is no minimum repayment amount.
There are different eligibility criteria for different types of business loans. However, by and large businesses in Singapore must fulfil the following criteria:
The documents required at the time of application may vary from one loan to another. However, there are few documents that every lender will require to process your application:
Most of the business loans offered by UOB have the option of applying online. Here are the steps involved in the application process:
If you wish to get in touch with UOB to know more about this facility, you can call UOB’s Corporate Call Centre at 1800 226 6121 or +65 622 66121. The lines will be open Monday to Friday between 9:00 a.m. and 6:30 p.m. excluding public holidays.