Monday 19 October 2020
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3 Alternative Ways for Singapore SMEs to Get Funding

For Singapore SMEs, the question of how to get funding is an important one. The question of financing is one of the most difficult pertaining to Small and Medium Enterprises (also known as SMEs). Unfortunately, there are a lot of obstacles that these businesses have to face, in terms of getting cost-efficient assistance.

Let’s take a look at some of the alternatives available to SMEs. Along the way, we can also develop an understanding of why it is so difficult for Singapore SMEs to get the funding they require in the first place. With all of this information, Singapore businesses of small or medium stature can be in a better position to get the funding that will allow their business to succeed over the short and long term.

Why Singapore SMEs Struggle To Get Funding

Only six in ten SMEs throughout Singapore receive financing from bank loans or similar institutions. The remaining four do not receive support from the banks. To that end, it is natural to wonder where their money is coming from. It is also worth understanding why four out of ten are unable to get the financing needed from banks to begin with.

An SME can be a lot of things. They can also suffer from the distinction of not being very well established. More often than not, their outlook cannot be described as stable. This creates an impression of less security than banks tend to require, when it comes to something like financing for the business. We must also consider the fact that Singapore is coming off a challenging 2016 on the economic front. While the nation has an outlook that can certainly be described as positive, the truth of the matter is that banks are still hesitant to take big risks.

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Alternatives For Singapore SMEs

If the banks aren’t biting, here are 3 alternative ways an SME can explore:

  • Crowdfunding: In the modern age, crowdfunding has become a powerhouse for helping people and businesses alike to secure the funding they need. There are numerous online platforms, with different sites focusing on different aspects of crowdfunding. For Singapore SMEs, crowdfunding is not only an effective way to get financing, but it also helps to build interest among consumers from the very beginning.
  • Government schemes/grants: The Singapore nation offers a number of different schemes for SMEs that are eager to secure straightforward financing. The list includes SMEs micro loans, SMEs equipment/factory loans, SMEs working capital loans, and others. SMEs venture loans are another option that can be explored. These loan schemes can provide businesses from all walks of life with a financial foundation that will allow them to plan for their future.
  • Invoice financing: Also known by the term invoice trading, this third and final option offers a short-term financing solution for SMEs. With this option, a business can receive financing based on invoices that are currently due from clients/customers. The company will pay a portion of this invoice amount to their lender, which is known as a borrowing fee. From there, a company can now access anywhere from 70-90% of the invoice amount.

About the Author
Morris Edwards is a content writer at, he writes different topics like 4 tips to ensure crowd funding campaign success, Singapore Has Established a Lucrative Innovation Fund for New Enterprises and all topics related to Business and Entrepreneurship, if you are interested about Singapore Company Registration Services visit our website.

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