Simple Ways To Spend Your SME Loan




Once you get your SME loan or temporary bridging loan, your challenge is simple, but far from easy. That is, you must create more value for your SME with the loan proceeds than you spend to obtain the additional working capital.

Everyone is talking about how to get a business loan, but no one actually thinks about the usage of it when you got it.

1. Invest in Employee Retention and Recruiting

If you’re like many other SME towkays, the pandemic made the already difficult task of retaining and attracting talent even more difficult. However, to scale your operations, you’re going to need more headcount.

Even if you’re not looking to hire more employees, it’s worth exploring an investment in your existing employees to ensure that you retain your best employees.

Many employees are concerned about returning to work, struggling to find childcare, or other obstacles created by the pandemic. Using your loan proceeds, you could provide a boost to employee retention and recruiting by, for example, setting up a program to subsidize childcare.

While this is a long-term investment, in the case of childcare, you can be certain your employees will be more productive. Plus, they’ll be more likely to stay with your company and recommend that others work for you too.

2. Modernize Your Business

The cost of the software required to run your business has cratered compared to just 20 years ago. Today, an SME could get up and running with accounting, CRM, inventory management, scheduling, marketing, and invoicing software for a couple of hundred dollars per month.

However, many small companies that have been in business for decades continue to use outdated tools.

To be fair, it’s not as easy as buying the tools you need and calling it a day; you have to integrate these new tools into your business in a way that makes life easier for your customers and employees. That’s where the proceeds from your new business loan can help your business grow.

By using your business funding to finance training employees and hiring experts to help you modernize your operations, you can avoid major disruptions. In this way, you can overcome the inertia that stops so many businesses from using technology to serve their customers more effectively.

3. Upgrade Your Business’s Equipment

One of the most popular new SME business loan options is to upgrade your equipment. However, it’s important to be strategic about how and when you choose to invest loan funds in new equipment or existing equipment upgrades.

4. Test a New Market or Product Idea

The COVID-19 pandemic has changed the world as we know it. With that change has come new opportunities for savvy entrepreneurs. However, when you’re running an existing business, risking your cash flow on new ideas may not be feasible.

By carving off a portion of your new loan for testing, you can vet opportunities before risking a larger investment. Of course, you’ll still need to be creative in how you test your idea to get the best return on investment.

For example, a digital marketing agency that typically serves enterprises could target smaller businesses by testing out new service packages.


After all, the world is far different than it was just a year and a half ago, prior to the COVID-19 pandemic. Plus, the majority of Singaporeans are being vaccinated, there’s reason to be optimistic about the state of the economy. There will certainly be opportunities for well-positioned small businesses to capitalize on this economic moment.

Through competitive analysis, you may find greater clarity in terms of how you might spend your new business loan to maximize ROI.

In addition to conducting a competitive analysis, you may benefit from contacting your loan broker to see how their other clientele typically utilizes their business financing options. They may have helpful ideas on how you can strategically use your SME business loan amount going forward!


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