Getting financing in Singapore: Banks vs Private Lenders

Running a business or facing unexpected financial challenges can often require additional funding. In Singapore, there are various lenders available to provide the necessary financial support. From traditional banks to private lenders, these institutions offer a range of financing solutions tailored to the unique needs of individuals and companies. In this comprehensive guide, we will explore the different types of lenders in Singapore and the financing options they offer. Whether you are a high-net-worth individual or a business owner, this guide will help you navigate the lending landscape and find the right solution for your financial needs.

Traditional Banks

Traditional banks have long been the go-to option for individuals and businesses seeking financing. These banks offer a wide range of loan products, including personal loans, business loans, mortgage loans, and more. However, obtaining a loan from a traditional bank can sometimes be challenging, especially for those with less-than-perfect credit histories or limited cash flow. Banks typically have strict lending criteria that consider factors such as credit history and the Total Debt Servicing Ratio (TDSR).

Private Lenders

Private lenders, on the other hand, provide alternative financing options to borrowers who may not meet the criteria set by traditional banks. These lenders are usually more flexible in their underwriting processes and can offer faster loan application decisions. Private lenders in Singapore, such as Tembusu Financial Services, specialize in delivering fast and flexible financing solutions to individuals, companies, and high-net-worth individuals (HNWIs) who possess valuable assets but lack immediate cash flow.

At Tembusu Financial Services, they operate as an excluded moneylender under the Moneylenders Act. They focus on assessing assets as a basis for evaluation and use proprietary capital and adaptable underwriting processes to expedite loan application decisions. This approach allows them to extend financing options to clients who face challenges securing loans from traditional banks due to various considerations.

Financing Solutions Offered by Tembusu Financial Services

Tembusu Financial Services offers a comprehensive range of financing solutions to meet the diverse needs of their clients. Their products include:

1. Business Loan: This loan is designed to provide financial support to businesses for various purposes, such as working capital, expansion, or equipment purchases.
2. Personal Loan: Tembusu Financial Services offers personal loans to individuals who need immediate cash flow for personal expenses, medical emergencies, or debt consolidation.
3. Mortgage Loan: If you are looking to purchase a property or refinance your existing mortgage, Tembusu Financial Services can provide mortgage loans tailored to your specific needs.
4. Caveat Loan: A caveat loan is a short-term loan secured against a property. It can be an ideal solution for individuals or businesses in need of quick financing.
5. Unsecured Loan: Tembusu Financial Services offers unsecured loans that do not require collateral. These loans are suitable for individuals or businesses who may not have assets to pledge as security.
6. Used Car Loans: If you are in the market for a used car, Tembusu Financial Services can provide financing options to help you make the purchase.
7. COE Renewal Loans: COE (Certificate of Entitlement) renewal loans are available for individuals who wish to renew the COE of their existing vehicle.
8. Car Dealer Floor Financing: This financing option is designed specifically for car dealers who require capital to increase their vehicle fleet.

With a team of seasoned professionals proficient in delivering an extensive array of loan options, Tembusu Financial Services stands ready to assist clients effectively. They prioritize collaboration and remain attentive to their clients’ requirements, ensuring personalized and reliable financial solutions.

Eligibility Criteria for Obtaining an SME Working Capital Loan

Before applying for a working capital loan, it is essential to understand the eligibility criteria set by lenders. While specific requirements may vary among lenders, here are some general criteria you can expect:

1. Business Registration: All businesses must be registered with the Accounting and Corporate Regulatory Authority (ACRA). This registration provides lenders with key information about your business, such as its structure, directors, shareholders, and paid-up capital.
2. Operating History: Banks typically require a minimum operating history of at least one year before approving a working capital loan. This demonstrates stability and the ability to meet loan repayments. However, private lenders like Tembusu Financial Services may offer loans to companies with an operational history of at least 10 months.
3. Minimum Annual Revenue: Lenders will assess your business’s revenue to ensure that you have the ability to repay the loan. The minimum annual revenue requirement for SMEs is usually around S$100,000.
4. Director’s Citizenship: At least one director of the SME must be a Singaporean, Permanent Resident (PR), or a foreigner residing in Singapore. 

Required Documents for a Successful Working Capital Loan Application

To support your working capital loan application, you will need to provide various documents. These documents are crucial for lenders to assess your business’s financial health and make informed decisions. While specific requirements may vary among lenders, here are some essential documents you should prepare:

1. Bank Statements: Prepare the latest six months of bank statements to demonstrate the financial standing of your business. Having a substantial amount in the bank will increase the lender’s confidence in your ability to repay the loan.
2. Financial Statements: Lenders typically require your company’s financial statements for the past year. These statements provide insights into your business’s cash inflow projections and spending habits.
3. Credit Bureau Singapore (CBS) Credit Report: Lenders will ask for the latest CBS credit report of your company directors. This report helps them assess your creditworthiness.
4. Moneylenders Credit Bureau (MLCB) Report: Some private lenders may require the company director’s MLCB report, which shows the individual’s credit history with moneylenders. This report is commonly required for borrowing from private financial institutions.
5. Additional Documents: Depending on the lender and the specific loan requirements, you may need to provide additional documents such as upcoming contracts, aging reports, or expected invoices. Prepare any relevant documents that can support your loan application.

Conclusion

When seeking financing in Singapore, it is important to explore the different types of lenders available. Traditional banks offer a wide range of loan products but may have strict lending criteria. Private lenders like Tembusu Financial Services provide alternative financing options for individuals and businesses who may not meet the criteria set by traditional banks. Through their flexible underwriting processes and extensive array of loan options, they can deliver fast and tailored financing solutions.

Remember to carefully review the eligibility criteria and prepare the necessary documents when applying for a working capital loan. By understanding the lending landscape and working with reputable lenders, you can secure the financing you need to overcome financial challenges and seize opportunities for growth.

At Tembusu Financial Services, they specialize in delivering fast and flexible financing solutions to help clients overcome obstacles. Their collaborative and client-centered approach ensures that they remain attentive to their clients’ requirements. If you are in need of financing, reach out to Tembusu Financial Services today to explore how they can support your financial needs.