top of page

Top methods for SME to get capital without the banks

Banks are the main source of financing for SME businesses, but the options of alternative finance are increasing tremendously


According to market data, Singapore is ranked 16 in terms of crowdfunding volume.

It’s no way to find millions in a single deal, but it is a quick and simple way for a small business to access funds.

The application is quite direct - pitch your business on one of the many online platforms.

In return, investors receive some incentive.

On the downside, however, borrowers will need to put in a bit of work to make sure their business gets visibility in the public eye. Meanwhile, if the target isn’t reached, any money that’s been pledged will usually be returned to investors.

Peer-to-peer Lending

Lending peer-to-peer works as a straightforward loan, the borrower is dealing with a large number of individual investors or a single financial institution may give the full sum of the loan amount.

Interest rates tend to be a lot higher than those of the banks but the application process is usually very quick; the money is often available within hours.

It will be good to make sure that the P2P lending company is regulated by the MAS, under the Securities and Futures Act, whereby they will be carrying the Capital Markets Services license.

Invoice Financing

This type of financing has become increasingly mainstream over the last few years.

We can say it’s the most popular funding route for small and medium-sized businesses in Singapore.

There are two types of invoice finance -

1) Factoring involves selling invoices to a company(factor) which then manages the whole process of chasing and collecting payments.

2) Invoice discounting sees the company doing this itself.

Either way, the company has access to the money it’s owed immediately. And it’s often possible to use invoice finance for just one, particularly large invoice, which is known as spot factoring.

Asset Finance

Asset funding has been around the financing era for the longest time possible.

They relate to the value of a business’s physical assets, such as vehicles, machinery, or any other equipment.

It will be highly beneficial for a business to have cash in their pocket in an event of a downturn in profitability.

With hire purchase, the borrower will pay only a deposit and fully owns the asset at the end of the term. With leasing, the asset will be handed back. Even with the refinancing option, it is possible to release cash by borrowing against an asset the business already owns. This is a highly popular strategy.

Merchant Cash Advances

A relatively new concept, this option is becoming increasingly popular among companies that use card terminals, such as retail and f&b businesses.

Borrowers can usually access up to a month’s turnover and regular repayments are made as a percentage of each card terminal payment until the full amount has been paid off.

Businesses only have to repay what they can afford, making it a particularly attractive prospect for seasonal businesses.


The good news is that there are quite of government grants available in Singapore, but the bad news is that the criteria are extremely tight and the application processes torturous.

Nevertheless, our government in Singapore is highly supportive in the growth of each SME, so we are truly blessed.

It’s important to check the criteria thoroughly, as eligibility is likely to be severely restricted, perhaps requiring more local hires or technology investment.

However, many small businesses that have accessed government grants have flourished and grown along the way.

The TBLP was introduced to help enterprises access working capital.

As announced in the Solidarity Budget on 6 Apr 2020, the Government will enhance the TBLP further with 90% risk share. The enhancement will apply to new applications initiated from 8 April 2020 until 31 March 2021. For applications that are pending approval from PFIs, enterprises are advised to speak to their PFIs on their eligibility.

As announced on 12 Oct 2020, TBLP will be extended from 1 Apr 2021 to 30 Sep 2021. Under this extension, the Government’s risk-share on the loan will be lowered to 70% with the maximum loan quantum lowered to S$3 million. This is to calibrate the support for businesses as the economy gradually recovers.

As announced on 5 Jul 2021, TBLP will be further extended for 6 months, from 1 Oct 2021 to 31 Mar 2022, under the same parameters

If you do not know what type of SME business loan suits your needs, Apply With Us Now and we will show you how!

bottom of page