SMEs are the backbone of Singapore’s economy, and many struggle to survive during the ongoing COVID-19 pandemic. To help businesses weather the storm, governments are rolling out various support measures, including financing schemes and subsidies. This blog takes a closer look at two popular loan options.
UOB temporary bridging loan
The UOB Temporary Bridging Loan is a government-backed loan program aimed at providing short-term financing to small and medium enterprises (SMEs) affected by the COVID-19 pandemic. The loan for small business in Singapore is available to companies registered and physically located in Singapore with loan amounts of up to $3 million and repayment terms of up to five years. One of the key features of UOB’s temporary bridging loans is that they offer a low-interest rate of 1% per annum, making them an attractive option for companies looking for affordable financing. Additionally, since the loans are unsecured, businesses do not need to post collateral to qualify.
However, it is important to note that UOB temporary bridging loans are subject to certain eligibility criteria and conditions. Companies must have at least 30% local capital, and loans can only be used for working capital needs such as salaries, rent, and overhead costs. Additionally, the organization has been affected by the COVID-19 pandemic and must prove that it has a viable business plan for recovery. Overall, uob home loan interest rate could be an attractive option for small businesses needing short-term funding to survive the pandemic. However, businesses should carefully consider their eligibility and repayment capacity before applying.
Business term loan
A business loan is a loan that is paid in advance and paid back with interest over some time. This is a popular option for businesses that need funding to cover expansion, equipment purchases, or operating costs.
One of the main advantages of business term loans is that they offer fixed interest rates. This means one can plan and budget for all repayments. In addition, the loan amount can be substantial, helping companies reach their growth goals.
Unlike UOB temporary bridging loans, business term loans are not government-backed, and eligibility criteria and interest rates may vary by lender. However, it is still a viable option for companies that need long-term financing and can repay.
When considering a business term loan, it is important to carefully review terms such as interest rates, repayment terms, and fees. Businesses should also ensure they have a solid business plan and can repay loans to avoid debt. In summary, many financing options are available for SMEs in Singapore, such as UOB bridging loans and government-backed loans, such as traditional business term loans. When considering these options, it’s important to carefully review the terms, eligibility criteria, and repayment capacity to make decisions that best suit the business’s financial health—additionally, seeking professional advice from a financial advisor.