Business expansion loans could be the lifeline to increase revenues

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Over half of entrepreneurs are expecting to increase their revenues by 50 per cent in 2019, yet many are facing an uphill battle when it comes to funding their business expansion.

By: Hitesh Khan/

According to EY’s latest Fast Growth Tracker published in the United Kingdom, 51 per cent of UK entrepreneurs face this tough challenge to fuel their business expansion.

Business leaders of some of the UK’s fastest-growing companies said they found funding to be their biggest blocker to business expansion, quoted by 51 per cent of the 380 founders and executives interviewed. Whilst the majority said they were still hungry for capital (66 per cent), the number of entrepreneurs who said they wanted to raise funds has fallen since last year – down from 71 per cent. 81 per cent of those were looking for a minimum of £5m and 19 per cent up to £10m.

Victoria Price, EY Entrepreneur of the Year Lead Partner in the North, said: “There are more sources of capital available to fast-growth, entrepreneurial companies than ever before. In the last couple of years we have seen funding options multiply, which has prompted some business owners to opt for a hybrid funding model – using crowdfunding to supplement venture or angel capital, for example.”

Singapore SMEs starting to be affected by trade tensions

business expansion
image credit: Alpha Stock Images

The challenges entrepreneurs of small businesses face in Singapore to fuel their business expansion is no different from their counterparts in the UK.

An SME Development Survey by DP Info in November 2017 said a major sticking point for entrepreneurs in Singapore is cashflow management, It said that an increasing number of firms struggling with delays in client payments.

The survey found about 35 per cent of SMEs saying they had finance-related issues – 13 percentage points more than a year earlier and the highest since the survey began tracking the issue in 2011. And among these 35 per cent, the proportion experiencing delays in payments from customers skyrocketed from 14 per cent in 2016 to 81 per cent last year.

A separate Spring Singapore poll conducted in Dec 2017 showed that 64 per cent of SMEs said they were facing some form of delay in receiving payments from customers.

Commenting on the challenge for funds entrepreneurs face for business expansion, Mr Paul Ho, chief mortgage consultant at iCompareLoan said, “businesses ought to remember that you need to borrow when you do not need money.”

He added: “When your business is struggling and you need additional funding to tide over a tough patch, then you will find that your access to funding is completely cut off and end up with very expensive funding.”

It may be wise to plan 6 to 12 months ahead for any potential funding needs. Even if you do not need funding now, you may want to quickly refinance your home loans for any potential equity and stand-by cash even if you do not need it now.

Remember, banks assess your credit and affordability at the point of application, so you should apply when your status is good, not when you have further deteriorated. At that time, no banks will lend you.

You can read more about the different types of funding here. If your business is profitable and you only need short term funding, but your access to bank’s working capital is temporarily cut off, then you should consider personal loans as a source.

SME loan unavailability and lack of access to credit is why businesses often fail

New businesses fail within a short period of starting and one of the main reasons why they do so is because they do not have access to credit or SME loan. There were 43,000 start-ups here in 2016, almost double the 22,000 in 2003, and according to the Department of Statistics, half of new businesses fail within the first three years.

Limited help is available to struggling entrepreneurs and enterprises from Enterprise Singapore, a statutory board under the Ministry of Trade and Industry (MTI). It was formed on 1 April 2018 to support Singapore SMEs development, upgrade capabilities, innovate, transform, and internationalise. It also supports the growth of Singapore as a trading and startup hub, and continues to be the national standards and accreditation body.

How to Secure a Business Expansion Loan Quickly

If you are searching for a business expansion loan, the loan consultants at iCompareLoan can set you up on a path that can get you a it in a quick and seamless manner. Our loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs. Find out money saving tips here.

Our Affordability Tools help you make better property buying decisions. iCompareLoan Calculators help you ascertain the fair value of a property and find properties below market value in Singapore.

If you are looking for a new home loan or to refinance, our Mortgage brokers can help you get everything right from calculating mortgage repayment, comparing interest rates all through to securing the best home loans in Singapore. And the good thing is that all our services are free of charge. So it’s all worth it to secure a loan through us for your business expansion needs.

Contact us for advice on a new home loan.

Contact us for home loan or refinancing advice.