Micro loan is a small business loan designed for Singapore SME companies. It is offered by banks in conjunction with SPRING Singapore. The loan amount can be as low as S$20,000.
SPRING Singapore is an agency under the Ministry of Trade and Industry responsible for helping Singapore enterprises grow and building trust in Singapore products and services. SPRING Singapore helps the Local Singapore SMEs to grow faster through financing schemes such as the Local Enterprise Financial Scheme (LEFS) which help pave the way to business success.
The LEFS Micro Loan Scheme is designed to help the smaller SMEs secure financing which can be used for purchasing of equipment, machinery, inventory, increase of manpower or meeting working capital requirements.
This Singapore Micro Loan Scheme is a low cost financing programme offered under the Local Enterprise Financial Scheme (LEFS). It is collateral free. The maximum loan exposure under this programme is S$100,000 per company.
The maximum tenure for this Micro Loan Scheme is four years and the effective interest rate is at 5.5%p.a.
To help SMEs access micro loans, SPRING shares the risk of loan defaults with Participating Financial Institutions in the event of company insolvency. To improve loan accessibility for young companies, SPRING has increased the risk-share for SME Micro Loans to companies that are less than 3 years old.
Companies applying for the SME Micro Loans should meet the following criteria:
^Annual sales turnover and employment size will be computed on a group basis (i.e. All levels up for corporate shareholders holding > 50% of total shareholding of the applicant company and any subsequent corporate parents, and subsidiaries all levels down)
– Bank Statement
– Financial statements
– Personal income tax assessment of owners and directors