Enterprise Financing Scheme

In an era of dynamic global markets and rapid technological advancements, access to adequate financing is crucial for businesses to grow and thrive. Recognizing the importance of financial support for enterprises, many countries, including Singapore, have established initiatives to provide comprehensive funding solutions. The Enterprise Financing Scheme (EFS) is one such initiative, designed to bolster the growth and competitiveness of Singapore companies across various industries. This article delves into the details of the EFS, exploring its benefits, eligibility criteria, and application process, offering a comprehensive guide to entrepreneurs seeking financial assistance for their ventures.

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Key Facts about the EFS

Benefits of the EFS

Eligibility Criteria for EFS

How to Apply for the EFS

Key Facts about the Enterprise Financing Scheme

The Enterprise Financing Scheme is a comprehensive financial support initiative designed to help local businesses access the necessary capital to foster growth and expansion. Launched by Enterprise Singapore, the government agency dedicated to championing entrepreneurship and supporting business development, the EFS aims to address the funding challenges faced by enterprises across various stages of their lifecycle. By offering a diverse range of financing options, the EFS empowers businesses to innovate, scale, and remain competitive in the dynamic global marketplace.

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Loan Amount

Up to S$50 million.

Timeline

The duration of the application process can vary depending on several factors. Typically, it can take anywhere from a few weeks to a couple of months.

Key Requirements

1. Company registered in Singapore;

2. 30% or more local shareholding;

3. Group Annual Sales Turnover not exceeding S$500 million.

Benefits of the Enterprise Financing Scheme

The Enterprise Financing Scheme offers a diverse array of loans tailored to cater to the unique financial needs and strategic objectives of Singaporean businesses. To ensure the smooth facilitation of these financing solutions, the EFS operates in partnership with accredited Participating Financial Institutions. These institutions play a pivotal role in disbursing the loans and working closely with businesses to evaluate their eligibility and customize the financing terms as per their unique circumstances.

One notable advantage of the EFS is its risk-sharing mechanism. In cases of enterprise insolvency, EnterpriseSG collaborates with the Participating Financial Institutions to share the loan default risk. This initiative helps alleviate the concerns of financial institutions, encouraging them to extend loans to businesses, and provides a safety net for businesses facing unexpected challenges.

Under the EFS umbrella, the following seven types of loans are available:

Designed specifically for project developers, system integrators, technology and solution enablers, the EFS - Green aims to support those who create cutting-edge technologies and solutions that actively combat waste, reduce resource consumption, and lower greenhouse gas emissions. This crucial financial initiative primarily targets sectors like clean energy, circular economy, green infrastructure, and clean transportation.

Borrowers can access a maximum loan quantum of S$50 million, allowing businesses to secure substantial financial support for their growth and expansion plans. Additionally, the maximum repayment period for these loans is set at 15 years.

The EFS - SME Working Capital Loan serves as a valuable financial resource for Small and Medium-Sized Enterprises (SMEs) in addressing their operational cash flow requirements. This initiative provides much-needed support to SMEs, enabling them to manage their day-to-day financial needs more effectively and sustainably. A maximum loan quantum is S$300,000 and the maximum repayment period for these loans is 5 years.

The EFS – SME Fixed Assets Loan (EFS-FA) is a targeted financing solution designed to support SMEs in funding their investments in both domestic and overseas fixed assets. This comprehensive loan offering covers a range of eligible expenses, including:

Purchase of Equipment and Machines: SMEs can utilize the EFS-FA to acquire essential equipment and machinery for automation and upgrading purposes. This includes the option to invest in either new or resale assets, providing businesses with flexibility in their procurement decisions.
Purchase or Construction of Factories and Business Premises: The EFS-FA extends financial support to SMEs looking to purchase or construct government- and commercial-built factories and business premises. Similar to equipment and machinery, SMEs can opt for either new or resale assets in this category, aligning the loan to their specific needs and preferences.

Under the EFS-FA, borrowers can access a substantial maximum loan quantum of S$30 million with a maximum repayment period of 15 years.

The EFS - Venture Debt (EFS-VD) is designed to provide financing for innovative enterprises seeking growth opportunities using Venture Debt and Warrants. It caters to high-growth businesses that may not possess substantial collateral for traditional bank lending. The enhanced programme allows the venture debt facility to be supported by warrants or redeemable convertible preference shares.

Enterprises can utilize the loan for various purposes, including expanding capacity, diversifying product lines, meeting working capital requirements, undertaking new projects, and pursuing mergers and acquisitions. The EFS-VD offers a valuable financial avenue for enterprises to fuel their growth and achieve their strategic objectives while leveraging innovative financing structures.

Under the program, borrowers can access a maximum loan quantum of S$8 million with a maximum repayment period of 5 years.

The EFS - Trade Loan (EFS-TL) caters to various trade needs, encompassing inventory or stock financing, structured pre-delivery working capital, factoring or bill of invoice discounting, overseas working capital loans, and bank guarantees (up to 2 years' tenure). This comprehensive financing solution covers both domestic and overseas transactions, providing businesses with the necessary capital and support to facilitate their trade activities efficiently and competitively. The EFS-TL serves as a valuable financial tool for enterprises, ensuring they can meet their trade-related requirements and seize growth opportunities in both local and international markets.

Borrowers can access a maximum loan quantum of S$5 million. The maximum repayment period is 1 year.

The EFS - Project Loan (EFS-PL) provides financing for the successful execution of secured overseas projects. This initiative offers support for various loan types, including working capital loans, funding for factory, building, land (covering purchase, renovation, and construction), investment in equipment and machineries, vessels, other fixed assets, and machinery hire purchase.

Additionally, the EFS-PL extends guarantees to support enterprises in undertaking and completing their overseas projects with confidence. This comprehensive financing solution empowers businesses to embark on international ventures, expand their operations, and accomplish project objectives while strengthening their global presence and competitiveness.

A maximum loan quantum is S$50 million and the maximum repayment period for these loans is 15 years.

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Eligibility Criteria for the Enterprise Financing Scheme

To qualify for the Enterprise Financing Scheme, businesses must meet the following eligibility requirements:

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Registered and Operating in Singapore: The applying business entity must be legally registered and actively operating in Singapore.

Local Shareholding: The company should have at least 30% local shareholding held directly or indirectly by Singaporean(s) or Singapore PR(s), as determined by the ultimate beneficial ownership.

Group Annual Sales Turnover: The company's Group Annual Sales Turnover should not exceed S$500 million.

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How to Apply for the Enterprise Financing Scheme

The application process for the Enterprise Financing Scheme typically involves the following steps:

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This series of articles regarding Singapore government incentives was prepared by CorporateServices.com, a leading Singapore-based corporate service provider. We offer a range of services for private limited companies in Singapore. Our team of experienced experts provides Singapore company registration and other incorporation-related services through our cutting-edge online platform.

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