5 reasons your SME needs a working capital loan

A working capital loan is a convenient way to help your SME with its day-to-day operating expenses, cashflow and even expansion. Here’s how your SME can benefit from taking on a working capital loan.

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1. It provides a short-term cash boost

Is your SME in need of cash, fast? Whether it is to develop a new product, stock up on inventory or simply to make payroll for the month, a working capital loan can help. If you take on a working capital loan with DBS, you can borrow up to S$300,000 over a five-year repayment period.

2. You don’t need to put your assets on the line

One of the key benefits of taking on a working capital loan is that it does not require collateral. Working capital loans are unsecured, meaning you don’t need to pledge your business assets or valuables as proof that you can repay your loan. This makes a working capital loan a low-risk funding option for your SME.

3. It can help improve your cash flow

Even if your SME is not particularly stretched for cash, you might encounter unforeseen circumstances where you need extra cash on hand. Taking on a working capital loan can ensure you have sufficient funds to pay your bills, or to see the company through a period of rapid expansion.

4. You’ll keep ownership of your company

You might have considered bringing an investor on board to provide a substantial cash injection for your SME. While bringing in an investor has its benefits, a potential downside is having to part ways with equity. You’ll no longer be the sole owner of your SME, which means decision-making will no longer be autonomous. Taking on a working capital loan could eliminate the need for an investor, ensuring you retain complete control over your SME’s operations.

5. You can decide however you wish to spend the money

One of the best things about taking on a working capital loan is that there are no restrictions on how you can use the funds. Most companies use the funds to pay off their current liabilities, which could include short-term debt, vendor payments, payroll and so on. Others require a short-term cash injection because of seasonal spikes in sales, which incur additional inventory costs.

Apply online now for a DBS working capital loan. You’ll need the consent and personal information of your guarantors, as well as supporting documents such as financial statements, bank statements, and your personal income tax assessment. These documents will help us get an accurate picture of your SME’s financial health so we can better assess your application.

For other financing options, you may also try our SME Financing Toolkit.

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