FAQ for Goverment Assissted Loan

SME ML

Max Loan Quantum: S$100,000

Repayment up to 4 years

     SME Eligibility Criteria

          Registered and operating in Singapore

           At least 30% local shareholding

           Group annual sales of ≤ S$100M or group employment size of ≤ 200

SME WCL

Max Loan Quantum: S$300,000

Repayment up to 5 years

     SME Eligibility Criteria

          Registered and operating in Singapore

           At least 30% local shareholding

           Group annual sales of ≤ S$100M or group employment size of ≤ 200

 Spring Singapore will co-share 50% of loan default risks with PFIs and SMEs.

Yes, you can. Potentially SMEs can apply for both schemes and get a maximum approval quantum limit of S$400,000 subject to bank assessment of your company financial standing.

The interest rate is at 6.75% effective but do note that interest rates are subject to PFIs discretion as they will do their own risk assessment and determine the final interest rates chargeable to the borrower.

One of the key features of the above scheme is no repayment penalty for partial or full redemption of the loan within the approved tenor. The borrower will only need to serve a month notice period for partial or full redemption to PFIs.

PFIs will charge a 1-2% processing fees and some might charge an annual fee thus do check with the PFI's before applying for the scheme

Typically, PFIs business term loan interest rates are higher and carry a lock in period i.e. any partial or full redemption of the loan within the loan tenor will incur a repayment penalty while SME ML & WCL does not have any repayment penalty.

Most PFIs business term loan will require ≥ 2- 3 years old incorporated company to be eligible for their loan while for SME ML & WCL, some PFIs will even accept ≤ 1-year company for the application.

No. To certain extend, with the Co-Risk sharing scheme PFIs will be more inclined to take in more loan exposure but that does not necessarily mean a lenient risk assessment.  PFIs will still approve applicant within their own credit parameter and comfort level although credit parameter differs; their main assessments are still mainly based on company Financial Report, Bank Statements and Individual Directors declared income assessments.

Most PFIs will require below standard documents for processing while some may ask for additional documents such as company’s debtor aging list, corporate Notice Of Assessment, GST tax filing, etc.

  • Latest 6 months company’s operating account
  • Latest 2 years company audited/ management report

  • Latest 2 years notice of assessment of directors/shareholders
  • Photocopy of directors/shareholders NRIC (front and back)

Under the scheme, SMEs can borrow up to S$100,000 (SME ML) and S$300,000 (SME WCL).

Taking into consideration that PFIs have their own credit exposure to a company and have an internal maximum loan guideline, in the event, an SME needs more than the approved amount for their working capital needs, it can apply to other PFIs for the remaining ‘balance’.

Noted that at the point of application with another PFI, the borrower will have to declare their SME Spring Loan exposure so that there will not be a double booking of limit with Spring Singapore. E.g if an SME took up a S$100,000 SME ML and also qualify for SME WCL, the secondary PFI will then apply under SME WCL for the PFIs.

SMEs can also do a ‘top-up’ of existing SME ML/WCL with PFIs after 6 months to 1-year servicing of the loan.

Different PFIs have different credit criteria; an unsuccessful application in one PFIs does not mean straight rejection in other PFIs. But the rule of thumb is SMEs can apply from the same PFIs who rejected their initial application in another 6 months time.

What Are the Likely Reasons For Rejection?

Reject application maybe due to the below reasons:

  1. Poor credit bureau standing of the guarantor of the application
  2. Loss making company
  3. Negative net-worth company
  4. Poor repayment conduct of existing personal or business loan facility with the applicant lender

  5. Poor mid/end month balance sighted

All business term loans will require company’s director & shareholder to be the personal guarantor. As per MAS notice 645 TDSR (Total Debt Servicing Ratio) guideline, 20% of the monthly repayment installment of any relevant credit facility in respect of which the borrower is a guarantor will be factored in the TDSR calculation

Depending on the PFIs, it can take as fast as a week approval to as slow as a month approval.

After PFI’s credit approval, PFIs will check with Spring Singapore again on the approval and it will typical take 3-5 working days for Spring Singapore to revert.

Once green light is given by Spring Singapore, Borrower can then signed the offer letter and thereafter it will usually take 3-5 working days for the funds to be disbursed.

Of course, in our platform beside the transparency of bank interest rates and the useful information on getting a business term loan in our constantly updated blog, we too understand the daunting task of going through the whole rigorous process of documents submission and numerous Q&A for a company to take up a business term loan.

Besides applying yourself, you can choose us to acts as a middleman between you and potential lenders. Our job is to work on your behalf and with several PFIs to find the best business term loan lenders who best fit your needs with the lowest rates. We have a well-developed stable of lenders we work with, making your life easier.

We are like your company loan concierge and do all the legwork for you, negotiate terms and make the approval magic happen all for a nominal fee.