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Debt Financing for Companies in Singapore

Debt Financing for Companies in Singapore

What is corporate debt financing in Singapore?

Whether facing financial difficulties or being in the first stages of starting a business, many Singapore companies seek possibilities of raising their capital in order to get passed pecuniary issues. Debt financing has become one of the most sought solutions for the past few years. Debt financing means borrowing an amount of money from a lender and return it at a later time with interest.

The number of banks offering company loans in Singapore has raised a lot during the last years due to the development of the start-ups sector. One of the greatest advantage of these corporate loans is that they are usually tailored for each company. This has also led to the development of the Singapore banking industry.

What are the most common debt financing options for Singapore companies?

Singapore banks have started to offer complex products for companies seeking to apply for a commercial loan. Among these, the most common are:

  • working capital loans which are usually contracted for short periods of time and the money is used for the day-to-day management of the company;
  • factoring loans under which banks will grant a company a loan in exchange for the company’s account receivables;
  • short-term financing which are contracted for periods of time of less than one year;
  • overdrafts which work as an extension of the credit line provided by a bank;
  • hire-purchase loans which are used for buying company-related goods which will be paid through installments.

If you want to open a company in Singapore and want to apply for a corporate loan, our specialists in company formation can help you.

How to make sure to obtain a corporate loan in Singapore?

Even if there are plenty of options when it comes to the number of banks offering debt financing solutions, Singapore companies must also prove they are worthy of obtaining it. In order to make sure one obtains the loan, the following tips can be of help:

  • – a solid business plan can increase the chances to obtain the loan;
  • – the owner’s track record is also very important as it raises their credibility before the bank;
  • – the company’s capital is also important when applying for a loan;
  • – the company’s projected profit speaks well about the possibility of repaying the debt;
  • – collaterals are also very important when applying for a corporate loan in Singapore.

For assistance with the documentation when applying for debt financing, do not hesitate to contact our consultants in company registration who can also offer advice on how to open a company in Singapore or assist you in case of company liquidation in Singapore.