FAQs

Credit Application Process
Lending Criteria/Collateral Requirement

CREDIT APPLICATION PROCESS

What are the available financial assistance schemes offered to SMEs and how does a company qualify for them?

Government Assistance Schemes, currently available are the Local Enterprise Finance Scheme (LEFS), Micro Loan Program, Loan Insurance Scheme (LIS), and Internationalisation Finance Scheme (IFS).

* For the Micro Loan Program, the applicant must employ not more than 10 workers (or not more than 200 if it is in the service industry).

For more information on government assistance programs, please contact the EnterpriseOne hotline at (65) 6898 1800 or e-mail enterpriseone@spring.gov.sg.
How does my company apply for a credit facility with the bank?

You may call a bank or visit any branch. Customer service officers would be able to assist you with the credit application process, which may vary from bank to bank. In most cases, the bank will require you to submit the following documents for processing:
1. Application Form (if any)
2. Notice of Income Tax Assessment of key promoter/director(s) (latest two years)
3. Financial Statements (latest two years, with at least one year audited for Private Limited Companies)
4. Other bank statements (latest three months)
5. Personal account statements for sole proprietor/partners (latest three months)
6. Business Plan (for startups only)
7. Memorandum & Articles of Association for private limited company
8. Profile of the promoter/sponsor/director(s)
On occasion, the bank may require you to meet with their representative in person.
What documents do I need to present to the bank when I require credit facilities? How much do I need to tell the bank?

Banks will generally ask for a current copy of your audited financial statements and latest management accounts, bank statements and business plans. These will give them a better understanding of your business needs and financial strength. You should be open in sharing your plans and commitments so that the bank can help you structure appropriate facilities.
What basic criteria does my company need to satisfy in order to obtain banking facilities?

Depending on its credit policies and requirements, a bank typically evaluates the applicant based on the following criteria:
1. Business Plans/Cash flow projections
2. Positive networth (typically comprising paid-up capital and accumulated profit/loss) which should be commensurate with the nature of the business
3. Ability to service monthly installments or financial obligations
4. Satisfactory conduct of operating bank account/s
5. Background information on the applicant/promoters and personal guarantors.

LENDING CRITERIA/COLLATERAL REQUIREMENT

Why is it that banks appear unprepared to lend if you have no collateral?

The most important consideration for banks in extending credit is your ability to pay. If you are able to show that you have good repayment ability, the bank will view your application favourably.
Why do bankers ask so many questions when I apply for a business loan when they are getting tangible security like property mortgages for their loan?

The most important consideration for banks in extending credit is your ability to pay. The questions a bank asks are intended to give a better understanding of your business. This will in turn help the bank to assess your application.
Why does the bank insist on the personal guarantee of directors when I have already mortgaged my property to it?

Banks generally ask for the personal guarantee of the directors as a sign of commitment by the directors towards the facilities granted.
If the value of my property that I provided as security has dropped by 30%, will my credit line be cut automatically?

Depending on your bank's lending policies and the terms ans structure of the credit facility, the bank may trigger a request for security top-up or partial loan repayment.
Are banks more interested in the large corporations and not small enterprises like mine?

SMEs make up a significant portion of businesses in Singapore and are therefore an important client segment for banks. Many banks have dedicated account officers to manage accounts of SMEs, separate and distinct from Corporate Banking which looks after the large corporations.
Is it not true that banks are only supportive in good times and in a crisis they will pull lines?

Banks have been supportive in bad times, helping SMEs to restructure facilities and ease their repayment during crisis. Customers should try to stay with one bank as far as possible, to build a meaningful relationship with a bank that best understands their needs.

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