Discover How the Enterprise Financing Scheme help SMEs in Singapore

The Enterprise Finance Scheme (EFS) is a risk-sharing program run by the government that aids SMEs in obtaining trade finance from financial institutions. The EFS-TL has been further expanded, as stated in the Solidarity Budget 2020, to enhance company access to trade funding lines and finance short-term trade facilities.

Know What Enterprise Financing Scheme Is

Businesses need to have access to sufficient capital in an era of competitive international markets and quick technical breakthroughs if they are to expand and prosper. Numerous nations, including Singapore, have launched programs to offer complete funding options in recognition of how important financial support is for businesses.

One such program, the Enterprise Financing Scheme (EFS), was created to support the expansion and competitiveness of Singaporean businesses in a variety of industries. This article goes into the specifics of the EFS, examining its advantages, prerequisites, and application procedure, providing a thorough overview for business owners looking for financial support for their endeavours.

What Should You Know About the Enterprise Financing Program?

The Enterprise Financing Scheme is a broad financial assistance program created to assist local firms in gaining access to the money required to support growth and expansion. The EFS was established by Enterprise Singapore, a government organization tasked with promoting entrepreneurship and fostering business growth, to address the financial issues that businesses encounter at different points in their lifecycles. The EFS allows firms to innovate, develop, and maintain competitiveness in an evolving global marketplace by providing a range of financing solutions.

These financing solutions include loans, grants, and equity investments tailored to meet the specific needs of each business. By offering such a diverse range of options, the EFS aims to ensure that businesses of all sizes and industries can access the funding they need to thrive and succeed.

Further, EFS also provides advisory services and mentorship programs to help businesses make informed financial decisions and navigate the complex landscape of funding opportunities.

Members of the Borrower Group

Applicant business, and corporate shareholders with a stake in the company of at least 50% at all levels and subsidiary in which the applicant firm owns more than 50 per cent of the shares, as well as any lower-level subsidiaries.

Eligibility requirement

Enterprises from all sectors will be eligible to use Enhanced EFS-TL with the following conditions:

  • Be established and active in Singapore
  • Have a minimum of 30% local ownership and
  • Have a group yearly revenue of no more than 500 million Singapore dollars.
  • Local shareholders are individuals who are permanent residents of Singapore or Singapore citizens and own ordinary shares.

Various Financing Options under EFS

Businesses can have different types of loans under the enhanced financing scheme. They are:

  • Green Loans
  • SME Working Capital Loans
  • SME Fixed Assets Loans
  • Venture Debt Loans
  • Trade Loans
  • Project Loans
  • Mergers & Acquisitions Loans

Steps Involved in the EFS Application Process

  • Investigation and Planning
  • Engage with Financial Institutions
  • Making an Application
  • Assessment and Approval
  • Distribution
  • Reporting after financing

Advantages of the Enterprise Financing Program

The Enterprise Financing Scheme provides a wide range of loans that are specifically suited to meet the distinct financial requirements and strategic goals of Singaporean firms. The EFS operates with approved participating financial institutions to facilitate the seamless implementation of these financing solutions.

These organizations are crucial in the loan distribution process since they work directly with businesses to determine their eligibility and tailor the financing conditions to suit their particular needs.

The risk-sharing component of the EFS is a noteworthy benefit. Enterprises works with the contributing financial institutions to split the risk of loan default in the event of business insolvency. This program offers a safety net for firms encountering unforeseen difficulties and eases the worries of financial organizations, motivating them to lend to enterprises.