How can start-ups get low-cost funding?

It was reported in today’s newspaper that “Value of SME loans grows at slower pace”.

“The value of loans made to small and medium-sized enterprises (SMEs) in the 12 months to June 30 increased by 9 per cent – down from a 13 per cent rise the previous year and an 18 per cent jump in 2011”

It is probably more difficult for small businesses and start-ups who find it difficult to initiate relationships with banks.

So how can start-ups get low cost funding?

Spring Singapore’s Micro Loan Programme provides loans of up to $100,000 for local small and medium-sized enterprises (SMEs) with 10 or fewer employees. The funds can be used for daily operations or for automating and upgrading factories and equipment.

The loan comes with a minimum 5.5 per cent interest rate for a tenure of four years and below. This is subject to participating financial institutions’ assessments of risks involved. You may apply for a Micro Loan if your company is:

Registered or incorporated in Singapore;
has 10 or fewer employees OR has annual sales not exceeding $1 million;
Has at least 30 per cent local shareholding; and Has group annual sales of not more than $100 million OR employment size of not more than 200. Annual sales turnover and employment size will be computed on a group basis.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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