Singapore’s SMEs account for two-thirds of the total employment in the country. Although small, they contribute a whopping total of S$200 billion to the economy – making them a vital player in the local economy. However, the odds are still stacked against these nimble enterprises, with just over 50 per cent of start-ups surviving past five years. Numerous challenges beset SMEs, from not transitioning to a digital environment fast enough to cash flow issues to dealing with small domestic markets.
Expansion and growth of SMEs
To achieve high sales growth, innovation, engaging in research and development (R&D) and placing an emphasis on technology is absolutely necessary.
A primary growth barrier faced by small businesses in Singapore is a small domestic market. Figures show that firms here have tried to overcome this barrier with more than half of Singaporean startups having ventured overseas and a significant majority servicing international customers. By integrating into global value chains, SMEs can move up the value chain.
As companies experience significant episodes of growth through their lifecycle, they would also need to hire the right talent with the appropriate skills to be able to cope with more complex operations.
Challenges faced when expanding and growing
To innovate, transform digitally and become a more prominent overseas player, SMEs need to acquire adequate funding. SMEs face an uphill battle of cash flow management and common financial pain points are not easy to overcome. Although many enterprises have ventured overseas, only a fifth of start-ups are self-sustaining and less than half have a positive cash flow. Without adequate cash flow, enterprises do not have the wherewithal to innovate and remain competitive in today’s market.
A study done by Visa and Deloitte found that 40 per cent of SMEs in Singapore do not have access to bank loan financing. Poor visibility of SME transactions and a tendency for banks to avoid lending to less established companies, lead to inadequate financing options available to SMEs. Being aware of and understanding the funding options available to you are key in having the capital to invest in digitalisation, additional manpower, better equipment and facilities.
Opal’s financing solutions
Opal (One account for Payment and Loans) is your all-in-one banking platform that offers a range of best-in-class financing solutions. Our micro loans, business term loans, revolving credit facility and invoice financing products provide favourable terms, are flexible and have a hassle-free approval process.
Micro loans & business term loans
Opal’s micro loans give you quick access to loan amounts of S$3,000 to S$100,000, solving any urgent cash flow needs. Business term loans are fast, unsecured loan products that offer larger loan amounts at S$50,000 and S$2 million with the option to repay with monthly installments.
Revolving credit facility
A revolving credit facility operates in a different way from term loans with businesses drawing money whenever needed until they reach their credit limit. Once you’ve repaid the sum or a portion of the sum, you will be eligible to borrow money once again. Interest is accrued on the balance owed monthly. Opal’s revolving line of credit allows up to S$1 million to be borrowed.
Invoice financing
This financial solution is especially useful for companies whose customers owe them money for goods and services. These unpaid invoices can be converted to cash upfront so that funds are readily available to you to finance your needs. Opal finances up to 80 per cent of the invoice value and provides a credit line of up to S$1 million.
Why is Opal the right option for your SME when scaling up?
Opal provides end-to-end financial solutions that give small businesses in Singapore a leg up. On top of loan solutions, we also offer international payments with attractive cross-border payment terms and multi currency accounts that allow for effective cost-savings when venturing overseas.
Opal is an all-in-one banking and payment platform, a unified destination, that serves the multiple financial-business needs of SMEs – translating to greater convenience and more attractive terms.
It is also a Major Payment Institution (MPI) licensed by the Monetary Authority of Singapore (MAS) and a credible financial solutions provider. With swift approvals and great terms, receive the funding you require and spur the continued growth of your enterprise.