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.