Unlocking Sustainability: A Guide to Enterprise Financing Scheme - SME Working Capital Loan

Enterprise Financing Scheme – SME Working Capital Loan

The Enterprise Financing Scheme (EFS) offers financing solutions for Singapore enterprises to meet their operational cash flow needs. As part of the Budget 2024 announcement, the maximum loan amount for the SME Working Capital Loan will increase to S$500,000 permanently from April 1, 2024.

About the Scheme

The EFS - SME Working Capital Loan (EFS-WCL) assists SMEs in financing their operational cash flow requirements.

Loan Details

Maximum Loan Amount: S$500,000 per borrower

[Note: Borrowers are subject to an overall borrower group limit of S$5 million for EFS-WCL. In addition, there is an overall loan exposure limit of S$50 million per borrower group1 across all facilities.]

Maximum Repayment Period: 5 years

EnterpriseSG Risk Share:

• 50% by EnterpriseSG

• Young enterprises may receive up to 70% risk share

• Borrowers are responsible for 100% repayment

• In the event of default, financial institutions must follow standard recovery procedures before claiming against EnterpriseSG for the unrecovered amount in proportion to the risk share.

Note: Borrower Group consists of the following: Borrower Corporate shareholders holding more than 50% at all levels up Subsidiaries where the Applicant company holds more than 50% shareholdings and subsequent subsidiaries at all levels down Subsidiaries where the Applicant’s Ultimate Parent Company holds more than 50% shareholdings and their subsidiaries at all levels down. Young enterprises refer to firms formed within the past 5 years with at least 1 employee and more than 50% equity owned by individuals.

Interest Rate

Determined by participating financial institutions based on their risk assessment.

Eligibility Criteria

1. Must be a business entity registered and operating in Singapore (including sole proprietorships, partnerships, LLPs, and companies).

2. At least 30% of equity must be held by Singaporeans or Singapore PRs.

3. Group annual sales turnover must not exceed S$500 million.

4. For the SME Working Capital definition, SMEs should have group revenue of up to S$100 million or a maximum of 200 employees.

Application Process

Interested enterprises can apply through participating financial institutions (PFIs) or the Enterprise Singapore Incentive Management System (ESIMS), subject to credit approval.

Frequently Asked Questions

Application Opening: The scheme launched on October 29, 2019. Applications can be made to PFIs.

Multiple Applications: Yes, enterprises can apply through different PFIs.

Impact on Existing Loans: Approved loans under former SPRING Singapore and IE Singapore will remain valid and unchanged.

Scheme Differences: The EFS has unified eligibility criteria and application processes, enhancing support for young enterprises and those in lower-rated markets.

Industry Focus: The scheme is inclusive and supports businesses across all sectors.

Support for New Businesses: Yes, it offers government risk sharing to help young companies secure financing.

Borrower Responsibilities: Borrowers must repay the full loan amount, with PFIs following standard procedures for defaults before claiming from EnterpriseSG.