SME financing made easy

Singapore’s small and medium enterprises (SMEs) are caught in a bind. On one hand, confidence in business remains high; the latest DBS SME Pulse Check found that SMEs were generally optimistic about business prospects for the year to come, with less than 5% of respondents indicating pessimism. 

On the other, 85% of Singaporean SMEs reported they were unable to secure sufficient funding to cover their business needs. A recent report found that only 29% of respondents successfully secured financing from a traditional bank or building society.^[1] The majority of respondents got funding from family, business partners, or personal savings. 

This shows that many SMEs lack access to the capital they need to ride the post-COVID economic recovery, or to cope with any unforeseen future disruption.^[2] With fewer liquidity buffers relative to MNCs and larger companies, SMEs need access to external finance to cope with crisis; and as Singapore SMEs support 71% of total employment, their trouble finding funding is not just a minor fiscal concern, but an issue of national importance.^[3]

“SMEs make up 99% of all enterprises in Singapore,” explained Joyce Tee, Group Head of SME Banking for DBS. “Improving their access to capital not only supports individual companies through uncertain times, it also improves the robustness of our country as a whole.”

Breaking barriers to SME financing

The available financing options for SMEs vary, catering to businesses of all sizes, levels of development, and areas of operation. Smaller SMEs, or businesses that an earlier stage of growth, may feel that the odds are against them particularly when getting approval for a loan. However, their access to financing may be better than they suppose.

It is true, startup-level SMEs face a higher bar for securing financing. That being said, it is not impossible: lenders can provide unsecured loans to SMEs, assuming the borrower’s business is at least six months old, and their business model or portfolio meets the minimum requirements set by the lender. Examples of such loans include DBS’s working capital loans and government-assisted lending schemes. 

In certain instances, companies can also show proof of confirmed orders to secure letters of credit from banks, so they can purchase raw materials to complete the sale. 

A longstanding relationship with a bank will also improve an SME’s odds for securing financing: they can leverage that good standing to access exclusive services unavailable to other businesses. This can be particularly useful in stressful business situations—during the pandemic, DBS’s relationship with SMEs may have been crucial to the latter’s survival. “The approach that DBS takes is to be supportive even in times of uncertainty, and also to be there for customers through unexpected economic situations,” explained DBS’s Joyce Tee.

For their customers, DBS proactively reaches out to them to assist in securing the financing they need. These customers have easy access to fully digital self-service applications for Working Capital Loans through DBS Quick Finance. 

For these pre-qualified customers, the self-service application requires no additional paperwork – they only need to go through a few steps on the digital app and get near-instant approval for a pre-determined loan amount of up to SGD300,000.

One minute to apply, one second to approve

DBS recognises the urgent need many SMEs have for capital, and the many reasons they require it: to buy equipment for a new store branch, to seize a once-in-a-lifetime opportunity for growth, or to simply relieve pressure on cash flow until a client’s payment comes through. That’s why they’ve set up DBS Quick Finance, to elevate the cash flow pressures SMEs face by providing them with the financial power they need, when they need it.

Starting the loan process is easy: just log onto your DBS IDEAL dashboard, and click on the Quick Finance banner. Select the amount and tenor, then accept the loan offer.

Many SME owners worry about the length of the application process and the amount of paperwork required before they can secure a loan. Not many care to spend the time or effort to apply for a loan with a small chance of approval. The DBS Quick Finance service is quick to debunk these concerns: thanks to its fully-digital flow, no documents need to be uploaded; the application can be done and approved in a single session, for sole proprietorship/single-director companies. 

There’s just one added step for SMEs with more than one director or partner: automated prompts will be sent to inform the other parties to ensure approvals are received from all authorised personnel once an application is initiated.

DBS Quick Finance offers immediate access to attractive product offerings like the previous Temporary Bridging Loans (TBL). The new SME Working Capital Loan offers up to SGD500,000 per borrower, with attractive interest rates, and allows repayment between one to five years.

These new approaches to SME financing by DBS broadens the range of financing lifeline businesses can tap on as part of their ongoing partnership with the bank.

Navigating future uncertainty

Even as business sentiment remains buoyant in Singapore, rising inflation and unpredictable global events generate near-term uncertainty that affect even the most solvent SMEs. 

“We want to be a business partner to SMEs to help them succeed. Whatever your industry or stage of business, cashflow management is very important,” Joyce Tee explained. “Having fast, easy access to working capital at the right time can help your business stay resilient against uncertainty.”

Finding quick, hassle-free SME financing through a trusted banking partner like DBS can help you navigate the immediate future, whatever ups or downs it brings. DBS Quick Finance is a self-service loan that can close the working capital gap: keeping your business prospects buoyant in the immediate future. 

Try SME Financing Toolkit now!

[1] FinTech Singapore, Singapore SMEs Struggle to Secure Financing, June 2022.
[2] IHS Markit, Singapore Economy Continues on Road to Recovery, July 2022.
[3] Singapore Department of Statistics, June 2022.