Equipment Leasing: The Way Forward in the Post COVID-19 World

As COVID-19 has disrupted many business operations, they had to learn to adapt to the unfavourable situation. It is no surprise that the demand for vehicles has weakened due to the economic disruption. This lower demand leads to lower revenue which will continue for a period of time, before the economy fully recovers.

The leasing market, on the other hand, has always been expanding in the markets through all stages of an economic cycle. It has been proven in the past to be a strong financing alternative even at times of an economic depression crisis. During the great depression back in the 1930s, companies that utilised alternative solutions of leasing out equipment have consistently performed well. Why is this so? Potential customers and clients who are badly affected by the financial crisis will seek to look for cheaper and efficient alternatives with equivalent needs to be satisfied. In this article, you will understand the good uses of equipment leasing, especially in times of an economic crisis.

 

 

Saving Costs

Equipment leasing saves your working capital that would otherwise be used if you were to make cash payment for your desired equipment. By using an equipment leasing system, you can still receive your specific equipment needs and spend at a budgeted amount. This allows you to save costs and make affordable payments over a period of time. It is an efficient system that allows you to save your money for business expenses and execute operational expansions in times of post COVID-19 situations.

 

 

Competitive Advantage

Equipment leasing gives you a competitive advantage which could help you to stay on top of the latest advances in equipment and technology. Leasing equipment also allows you to adjust as the industry progresses and increases flexibility as you can make upgrades to newer equipment. This advantage that you receive will not be possible if you choose to buy equipment, as you are stuck with it till you sell it. Thus, equipment leasing is most suitable if you have to use equipment that needs to be constantly updated with better technology and capabilities.

 

 

Repair and Maintenance

Repair and maintenance is a major factor when you purchase any piece of equipment. However, equipment leasing agreement will help businesses to avoid any incremental costs for repair and maintenance. In most circumstances, the leasing company will cover the cost of repair and maintenance equipment in the event that it breaks down or spoils. They will provide the benefit of repairing and maintaining the equipment as necessary.

 

 

What to expect in Equipment Leasing Process

When applying for an equipment lease, you can expect the process to include the following steps.

 

Step 1

First of all, you need to complete an equipment lease application. Repair and maintenance is a major concern for any piece of equipment, especially when you buy it. A leasing agreement will help businesses to avoid any costs for repair and maintenance. The leasing company, in most cases, will cover the equipment cost in the event that it breaks down, and the company will repair and maintain the equipment accordingly.

 

Step 2

Upon submitting the lease application, the company will contact you within 24 to 48 hours.

 

Step 3

Once you receive approval, you must review and finalize the lease package, including monthly payments offered by the company. You will be required to sign the documents and resubmit them to the company, along with the payment.

 

Step 4

When the company receives and accepts your documents and payments, the lease will now take effect and you are free to accept leasing delivery of the equipment and commence any upgrades necessary.

 

 

Where to Lease Equipment

When it comes to leasing equipment, it will be wise if you choose a professional company with remarkable years of experiences. The ETHOZ Group provides equipment leasing in Singapore, where you can enjoy all the profit-generating benefits and convenience of having your own equipment without the headaches of asset depreciation. This is an ideal financing option for companies looking to increase liquidity and better manage cash flow.

Equipment leasing allows you to bring in the equipment and technology your business requires without expending your working capital or business credit line. Here at ETHOZ, we understand how equipping your business with the right equipment can help increase productivity, improve efficiency and make a dramatic improvement to your bottom line. Apart from that, equipment and technology are extensions of your company’s brand that plays an important role in how your company is perceived by your customers and prospects.

If you ever need any equipment leasing solutions in Singapore, you can simply reach out to a member of our team at contactus@ethozgroup.com to explore the options available to you. If you like reading more of such content, head over to our blog to learn useful tips and case study!

 

 

Different types of Financing in the Singapore Market

Business financing is the process of funding business activities, making purchases, or investments. The financial markets in Singapore are well-established and financially stable. Comprising different financial sectors, our country is certainly a profitable financial hub.

Overall, there are many different types of business financing in the Singapore market, such as banking (especially investment banking and treasury activities), wealth management, insurance and capital market services (capital financing equipment leasing, auto leasing and commercial vehicle financing).

 

Banking 

The common term of banking is an industry that handles cash, credit, and other financial transactions. Banks play an essential role in the economy by providing a financial service for people wishing to save and offering finance to businesses who wish to invest and expand. These continual loans and business investment are important for enabling economic growth in the country. On a company’s cash flow bank statement, there is a section that is also known as cash flow from financing activities, which summarizes how the business was funded over a particular period. The financial activities include:

 

  • Issuing debt to raise money
  • Repaying debt
  • Issuing equity to raise money
  • Repurchasing equity
  • Paying dividends

 

The bank is a safe place to store extra cash and credit for customers and organizations. The bank offers financial transaction services such as savings accounts, certificates of deposit, and checking accounts. Banks use these deposits to make loans such as home mortgages, business loans, educational loans and car loans. However, the trend of car loans has been declining. This is due to the advantage of car leasing, which generates a lower cost of acquiring and maintaining the car. Moreover, car leasing requires little or no down payment, and monthly leasing fees are usually lower than car loan payments. At ETHOZ, we offer professional car leasing services for all individuals, organisations, and companies. We are also flexible when it comes to the cost of car rentals, offering a comprehensive range of financing solutions tailored to meet your budget constraints.

 

Wealth Management

Wealth management is an investment advisory service that combines other financial services to address the needs of affluent clients. Wealth management refers simply to money management, in all its aspects. Wealth management firms make money by charging fees for the various services they provide. In addition, wealth management firms provide clients with brokerage accounts, so clients can access virtually any type of investment. In addition to investment services, wealth management clients are provided with tax planning, estate planning, and retirement planning services. Wealth management requires a team of highly skilled and professional investment management advisors, along with a wealth manager to direct them. Wealth management is important and it involves more than just an investment advice. The process encompasses all parts of a client’s financial life. A client will benefit from a holistic approach that brings together several services to meet their specific financial goals. In another word, the client no longer has to obtain different pieces of financial advice from different sources.

Wealth management can help to maintain a client’s wealth and guide them in meeting their specific financial objectives. For instance, many wealth management solutions are tailored for particular clients. These solutions take into account a client’s current financial status, future goals, current wealth and other significant factors.

 

Insurance 

Insurance is a type of coverage that is available to help you pay for damage to your property, car, medical bills etc. Likewise, it can be used to pay others on your behalf when you injure someone or damage their property. Insurance is a contract that transfers the risk of financial loss from an individual or business to a legitimate insurance company. It is extremely important as it helps to stimulate financial stability while promoting trade and commerce activities. This results in a sustainable economic growth and development in the country.

In another word, it is a type of business financing that uses probability and large numbers to determine the cost of insurance premiums charged to the clients based on various risk factors. The rate of returns must be realistically sufficient for the company to pay claims and expenses in the future, while making a reasonable profit, but not so much that it turns away potential customers. Insurance companies market their products and services to consumers in different ways. The price companies charge for insurance coverage is subject to government regulation. At ETHOZ, we provide a comprehensive range of auto solutions for authorised accident reporting and repair centre for the major insurance companies in Singapore, making us a one-stop reporting and insurance claim service centre for our customers’ complete convenience and peace of mind.

 

Capital Market 

The capital market plays an extremely important role in channeling savings into productive investments for the country’s development of commerce and industry. These markets mobilize savings in an economy and divert them into productive investment. As a result, the capital market significantly helps in the capital formation and economic growth of the country.

The capital market also refers to a huge spectrum of tradeable assets that includes the stock market as well as other trading different financial products such as capital financing equipment leasing, auto leasing and commercial vehicle financing. A capital lease is usually long-term and non-cancellable and is used to lease equipment that the organisation wants to use in the long term or buy at the end. At ETHOZ, we offer a range of services that includes capital financing equipment leasing solutions and integrated automotive solutions like auto leasing and commercial vehicle financing. We are proud to be appointed by Enterprise Singapore to provide loans.

 

Find Out More about Business Financing in Singapore

For those individuals who are seeking to find out more about business financing in Singapore, it is important to do some research using an ample amount of time to prevent any possible hiccups. At ETHOZ Capital Ltd, we provide a wide spectrum of capital financing solutions – all individually customised to suit customers’ unique needs and requirements.

Take a look at our business financing solutions or simply reach out to a member of our team at contactus@ethozgroup.com to explore the options available to you. If you like reading more of such content, head over to our news to learn useful tips and case studies that can help your business!

 

 

4 Business Costs You Could Be Saving On in 2020

Every business requires reliable cash flow to stay afloat — especially when times get tough. But choosing where to spend and where to save is a difficult decision for anyone running a business. The coronavirus situation has undoubtedly put a dent on the finances of many businesses which has made it even more important to adopt cost-cutting strategies to control expenditures and maintain positive cash flow.

Identifying non-essential costs and strategically cutting them can help you keep up your profits and prepare for life post-COVID-19. For businesses that are trying to cut expenses to boost your cash flow, here are some business costs you should be saving on to maintain your market presence.

 

 

Reduce Vehicle Expenses

If you are running a business that requires a fleet of vehicles, you should be well aware by now how exorbitant vehicle costs can be. From fuel to servicing costs, especially for larger vehicles, these vehicle expenses can end up affecting your finances greatly if not managed effectively.

 

 

Commercial Vehicle Leasing

One way to reduce vehicle costs would be to not pay in full for the vehicle, to begin with. In other words, you can greatly cut your vehicle costs by engaging in vehicle leasing. Leasing a vehicle comes with certain advantages such as paying fixed monthly costs, leaving the maintenance and repair works to the leasing company as well as the ability to return the vehicles once the leasing period comes to an end.

At ETHOZ, we offer commercial vehicles of all configurations and customisations to meet your unique needs, allowing you to focus on the parts of your business which matters most. If your finances are tight or you are a business that is just starting out, leasing vehicles is a cost-efficient solution that will allow you to have better control of your cash flow. For the month of September, we are having a promotion for one of the top van rental options – NV200 van rental. For more information, drop us an enquiry or call us at 66547788.

 

 

Eliminate non-essential costs

 

Downsizing your office space

With many companies still adhering to work-from-home policies, it might be a good time for companies to assess their current office space to consider downsizing in the interests of cutting costs. If you run a particularly small business, it might be a more economical option to relocate to a smaller office space which will inevitably help you save on rental fees. In addition, with fewer renters seeking commercial spaces for rent at the moment, businesses can use this opportunity to negotiate favorable terms and conditions to be included in their leasing contracts.

Another option small teams can explore would be coworking spaces, which can be a great option to save on administrative costs especially with most of the team working from home indefinitely in many parts of Singapore.

 

 

Look for Alternative Affordable Options

While it is important for businesses to make investments to earn money, the COVID-19 pandemic has taught us that it is always important to have cost-saving strategies in place to survive any unprecedented impact on the economy. For instance, for companies that regularly make wholesale supply purchases, finding the best deals on the supplies you need can help cut supply costs greatly and help you better manage your finances.

Also, since many businesses are unable to accommodate foot traffic in their physical stores, investing in affordable digital sales strategies and moving their sales online could greatly reduce operational costs and engage customers to shop digitally. Seeking such cheaper alternative options can help businesses stay afloat even when the economy has taken a hit.

 

 

Seek Financing Solutions

Another way businesses can save costs is by seeking business financing options that best fit the requirements of your business so that you can enjoy the financial freedom it offers.

For instance, at ETHOZ, we offer a variety of loans ranging from working capital loans to term loans and even renovation loans which can help your business save costs and keep your daily operations running smoothly. Whether you’re looking for a technology upgrade or securing investment for your business, you can obtain easy access to our funds at competitive rates so that you can focus on growing your business.

 

 

Streamline Your Marketing Efforts

If you have yet to analyse and update your marketing mix according to what works, you may find that doing so will help you cut down on your expenditures greatly. For some businesses, you may spend money on different forms of marketing, out of which some of them may not be as effective in delivering the desired results.

Look for the areas of marketing where you have been investing a significant portion of your finances but are not producing results. Once you have identified these areas, looking for alternative and less expensive ways to get your message across can help you cut costs and utilise your marketing budget as effectively as possible.

 

 

Financing Options for Businesses in Singapore 

Running a business successfully during the pandemic can be a challenging and stressful period for many business owners. The challenge for many businesses is finding ways to reduce their costs without lowering the quality of their products or decreasing output

 

 

How Businesses in Singapore Can Prepare for a Post Covid-19 Economy

With most coronavirus restrictions being lifted, businesses are in full swing to reopen and rebuild their operations. Singapore hopes to get its economy back on track after experiencing a  technical recession last quarter due to insufficient external demand and stringent COVID-19 “Circuit Breaker” measures.

Since late 2019, COVID-19 has infected over 4 million people around the world, wiped out hundreds of thousands of lives and crippled global supply chains. In a matter of weeks, industries such as manufacturing, tourism, aviation and many more were adversely hit by the drop in demand as a result of workplace closures and COVID-19 restrictions.

In order to stay relevant in a post-COVID-world, companies must reconsider their current operations and revamp their business models instead of going back to ‘business as usual’. From financing options to operational adjustments, here’s how businesses in Singapore can prepare for a post-COVID-19 economy.

 

 

1. Leverage on Support Programmes

The government and many organisations have rolled out various financing measures and programmes in Singapore with the aim of helping businesses better respond to the pandemic. For instance, at ETHOZ, as part of our Temporary Bridging Loan Programme (TBLP), we’ve collaborated with Enterprise Singapore to give companies access to working capital for their business needs.

Under the TBLP, qualified corporations can receive a loan of up to $5 million with the interest rate capped at 5% per annum. This would mean that businesses will have sufficient funds to invest in inventories, equipment, training programmes and satisfy day-to-day operational costs. To learn more about this, visit Enterprise Singapore website to find out more about the Temporary Bridging Loan Programme (TBLP).

 

 

2. Telecommuting is The New Normal

Many have predicted that telecommuting will last beyond the pandemic, and there are a few reasons why. Research has shown that employees are more positive and productive when telecommuting and working remotely as compared to working from traditional office spaces. Not only does it offer flexibility to employees, but it also reduces commuting time.

However, working from home can be a double-edged sword, given that there are possibilities of cyber threats as cybercriminals know that when more people are communicating online, it’s easier to deceive people to gain access to their private and confidential information. 

To fight cybercrime, businesses should conduct frequent updates, ensuring that operating systems and browsers are up to date with the latest cyber security software. Also, it is necessary to install firmware updates on hardware such as printers to prevent falling for the latest threats. We also strongly encourage businesses to educate and train employees on  the company security policies and how to spot phishing scams.

 

 

3. Put People First

According to COVID-19 Consumer Research, more than 64% of the workforce around the world is experiencing a great sense of fear and anxiety over their personal job security. Thus, companies should constantly seek feedback from employees and offer them a voice to share their concerns and worries.

Companies can consider leveraging on the government measures implemented to help businesses cope with COVID-19 such as sending their employees to government-funded in-house and SkillsFuture courses. These initiatives equip them with relevant knowledge and expertise that will help to enhance their skill set, and give employees a greater sense of confidence as they work through the current economic climate.

 

 

4. Sustaining Cash Flows

According to Harvard Business School, the average small business has sufficient cash reserves to last for only 27 days. Poor cash flows are one of the biggest killers of companies.

To ensure a steady stream of cash flows, the first step is to understand what your current cash flow position is and determine how long your company can operate under such conditions. Next, examine your cost structures and identify the activities and resources that are vital and the ones that are not mandatory in keeping your business running.

Monitoring your accounts receivable and getting your customers’ commitment to the payment date can give you a peace of mind that you’ll receive the payment on time. Other methods of generating revenue include selling unwanted assets to others and forming strategic collaborations with other firms to gain a larger pool of customers and increase sales for both firms.

 

 

Prepare for a Post COVID-19 Economy

While it is challenging to survive post-COVID 19 economy, strategies and actions need to be taken. We hope that this article has helped you generate ideas to prepare for a post-COVID-19 economy. Should you have any enquiries related to financing your business or the Temporary Bridging Programme, do not hesitate to drop us an email at contactus@ethozgroup.com contactus@ethozgroup.com!

 

 

How Leasing & Hire Purchase Can Improve Your Business Operations in 2020

Many companies in Singapore are struggling to find the capital to purchase equipment necessary for their business operations to continue functioning at optimal capacity, especially with the global economy in its early stages of recovery due to the coronavirus.

An increasing number of businesses in Singapore are turning to alternative methods such as equipment leasing or hire purchase. In essence, these methods help businesses acquire equipment that would normally be too expensive to buy with cash. In this article, we will be covering some of the ways an equipment leasing and hire purchase can help you finance your business and ride out this rough economic patch.

 

 

The Difference Between Equipment Leasing and Hire Purchase

Both equipment leasing and hire purchase are great ways to finance your business’ need for new or improved equipment. Opting for either one has its own major benefits but what’s the main difference?

Essentially, leasing allows you to rent an asset for a specific period of time for an agreed fee. At the end of your lease agreement, you will have to return the equipment to your rental company in its original condition or risk paying extra fees.

Alternatively, hire purchase allows you to purchase and use expensive pieces of equipment without incurring a major outflow of cash. You will have to make an initial down payment, followed by monthly payments for a fixed time period. After all the repayments are made at the end of the period, you will have the option to own this asset.

Now that you know the difference between the two options, let’s explore how you can use these methods to improve your business operations.

 

 

Buy New Equipment or Repair Existing Equipment

Even if your business is well-established, you may not wish to spend a large portion of your revenue on equipment as preserving working-capital is vital in paying off short term expenses and debts.

Depending on the specific needs of your business, having money on-hand can significantly improve your company’s level of productivity, whether you have faulty equipment at hand that needs repairing, or a need to upgrade your equipment to expand your business. The purchase of new equipment can be helpful for your business if it improves processes and increases competitiveness in your industry by meeting consumer demands.

Conversely, if a piece of equipment that’s crucial to your daily operations needs repairing, opting for leasing alternatives can also be exceptionally helpful in reducing downtime, and any related financial losses from the equipment breakdown for the time being.

At ETHOZ, we have your best interests at heart. Aiming to preserve your cash flow and improve your business, we provide equipment leasing and hire purchase at affordable rates that are easy to obtain. That way, you can finance your purchases with low or no downpayment, freeing you to focus on growing your business and using your working capital for other pressing needs.

 

 

Invest in Small Pieces of Technology

With the right financing, you will have the ability to invest in equipment that will not only increase the level of efficiency in your business but create better customer experiences, which will aid in forging better relationships with your customers and employees.

Instead of financing major operational upgrades, you may want to consider investing in smaller pieces of technology that will have an impact on customer satisfaction, which will ultimately improve business performance.

For example, if you own a business in the F&B industry, you could invest in tablets to provide customers with a more efficient method of ordering, and at the same time ease the workload of your employees. The tablets can also be used as an effective way to get customers to leave feedback or reviews, which will be a great avenue for you to develop some ideas on how you can improve your business to establish brand loyalty and generate greater revenue in the future.

 

 

Go Green: Utilise Energy-Efficient Equipment and Appliances

Having an environmentally-friendly business can be an effective method to save costs in the long-run, ultimately allowing you to run a cost-effective business.

There are a few easy ways to go green when you look into leasing or hire purchase of your new equipment. You can invest in energy-efficient equipment and appliances such as air-conditioning facilities which will help save money on energy costs.

Another way to save on electrical bills is to install energy-saving features like motion sensors around your workplace which will detect when people are present, managing the use of electrical appliances at your place of business without you having to worry about wastage. If your place of work is an office, you may also consider switching to laptop computers as they are generally more efficient and use 80% less energy than desktop computers.

Moreover, owning a green business also comes with attractive tax incentives. If you’re interested in finding out more about how you can use equipment leasing or hire purchase to invest in energy-saving equipment at your workplace, feel free to consult our professional relationship managers at ETHOZ. With the right plan, we can help you make a lasting impact on your business using equipment financing.

 

 

Finance Your Business in Singapore

If you’re short on funds but in need of new machinery and equipment, ETHOZ provides the solution to all your equipment financing needs. Ease your mind and finances with us as we provide you with attractive equipment leasing and hire purchase packages that will help you take your business further.

Our professional relationship managers that are ready to take your call are also well-qualified and trained to make the process as hassle-free and convenient for you. Contact our team at 66547799 or drop us an email at contactus@ethozgroup.com today!

 

 

An Entrepreneur’s Guide to Funding Your Local Business

Over the years, there has been an increasing number of new businesses being set up in Singapore. Reports show that at least 7% of Singapore’s population engages in entrepreneurial activity and at least 1 out of every 100 Singaporeans run their own business. But with all the benefits of being your own boss, there are still some challenges that need to be carefully navigated when setting up your own business.

One of the biggest entrepreneurial challenges is finding adequate financing to execute business plans and run operations in the market, especially given the current economic downturn due to the coronavirus pandemic. Many small businesses casualties are seeking financial help or relief to prepare for what lies ahead.

Thus, whether you’re a businessman looking to turn your entrepreneurial plans into a reality or an owner of a startup looking to raise capital, we’ve put together a list of funding options that are available in Singapore.

 

 

1. Taking a Bank Loan

Taking out a bank loan is a reliable method to finance your small business. However, bank loans are often tough to qualify for as banks are more inclined to finance firms with either a long and credible track record or substantial private assets as collateral. Banks also approve loans based on this financial information and therefore, loan quantum can be low, leading to insufficient funds to operate.

Another important thing to note is, though you get to maintain full management and control over your company as the bank will not get involved in any aspect of which you run your business, the interest rates for small-business loans from banks can be high, ultimately stunting your company’s business growth. If you also see yourself needing funds more urgently, be mindful that banks take a longer time to approve loans and disburse funds. Therefore, it’s important for small business owners to weigh the advantages and disadvantages of bank loans against their financial capabilities.

 

 

2. Taking a Term Loan

Businesses may find it hard to innovate and keep up with evolving market trends as well as customer and resource demands. In order to survive, small businesses especially, need to innovate and adapt. To do this, you will require financial means to support the changes and improvisations you decide to make.

At ETHOZ, we provide business financing support in the form of various term loans for small businesses, SMEs and MNCs across many industries; allowing companies to grasp crucial opportunities and continue to grow during trying times.

From working capital loans and business term loans to shipping loans and renovation loans, we provide different term loans that cater to the specific needs of your business. We can finance anything from daily operational expenses, employee payrolls and the clearance of debt to the purchase of fixed assets such as inventory or equipment and even the refurbishment of offices or retail space. Apart from financial information, ETHOZ is also able to take into consideration your assets such as property as collateral ultimately providing you with a higher loan quantum, giving you more funds to operate your business.

As every business has different financial considerations, having a good understanding of the way your business works will help you make the right decision when it comes to funding. ETHOZ offers term loans that are priced competitively at affordable interest rates catered to your financial budget and business needs.

 

 

3. Self-funding

Self-funding refers to the use of your own financial resources such as capital from your personal savings account or credit cards to fund your business. This is generally considered a risky option because one misstep could mean the end of your startup and a major setback in your personal finances.

 

 

4. Crowdfunding

Alternatively, crowdfunding is an innovative system of business financing which consists of the collection of monetary contributions from large groups of people. There are popular crowd-funding platforms in Singapore such as Funding Societies and Kickstarter that look specifically into the financing of small business startups in Singapore.  Do be mindful, however, that the interest rate for crowdfunding is usually high.

 

 

5. COVID-19 Government Schemes For Local Businesses

In addition to the attractive government grants and funding schemes made available to startups in Singapore, enhanced measures and financing initiatives have been rolled out in 2020 to help businesses respond to the global economic disruption caused by the coronavirus pandemic.

Financial support measures from the government across various sectors has helped businesses address immediate needs while endeavouring to tackle and adapt to long-term effects from this economic setback. There are even Booster Packages aimed specifically at helping the E-Commerce and Food Delivery industries.

For companies that are looking for financing options in Singapore, a working capital loan is a good option, as loan limits have been raised due to COVID-19. At ETHOZ Capital, our Working Capital Loan schemes are designed to cater to SMEs with group revenue of up to $100 million or a maximum employee count of 200. This allows eligible companies, to apply for a loan amount of up to $1 million dollars.

If you’re looking for a financing option to help manage more urgent business needs, the Temporary Bridging Loan Programme (TBL) is another suitable option for you. Introduced along with the Budget 2020, the Temporary Bridging Loan Programme (TBL) is a government-assisted financing scheme made available to SMEs across all industries in Singapore to provide working capital to fund business needs even the current economic climate.

As a participating PFI, our relationship managers at ETHOZ Capital can provide you with the details needed regarding eligibility, loan terms and so on to ensure your application for a TBL may get approved with ease.

 

 

Finding Opportunities for Business Funding in Singapore

With most small businesses, navigating financial challenges to raise capital is not easy and a lot goes into working towards and achieving one’s business goals. As mentioned above, having a deep understanding of your business will be the first step in figuring out the type of financial solution you require. However, in some cases, the solution may not be straightforward and if you require some assistance, our experienced relationship managers can help you out with this. Simply give our team at ETHOZ a call at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

 

 

A Guide to Applying for SME Capital Loans in Singapore

There’s no denying that many people dream of being their own boss, which explains the rise of entrepreneurs in Singapore. With an increasing number of people chasing their dreams to build their own businesses, it also brings about the realisation that the road to success is fraught with several challenges.

It is essential for businesses to have reliable sources of funding to ensure that operations can run smoothly on a daily basis. While running a business comes with inevitable risks, being well prepared for such risks can minimise the potential problems caused by a shortage of funding. Many businesses only consider taking up a capital loan when they find themselves cash-strapped. However, understanding capital loans and investing in them early on can allow you to seize crucial business opportunities knowing your finances are in order. For those who’re wondering how to go about applying for a working capital loan, check out our useful guide on everything you need to know about your financing options!

 

 

Why You Need A Capital Loan

Whether you’re just starting up your business or you’re looking to expand, having enough working capital to finance your daily operations is important to cover expenses and keep your business going. A capital loan is basically a loan you can obtain from a bank or from other institutionalised lenders to finance costs such as wages, rent and debt payments — especially when your business is under financial stress.

Many companies do not have a steady stream of income throughout the year which can be attributed to a multitude of reasons. For instance, businesses in the manufacturing industries often experience cyclical sales which results in periods where business enters a lull period. In order to continue covering the daily operational expenses, a capital loan will help you overcome such periods, and the loan can be repaid when business picks up.

 

 

When You Should Apply For SME Capital Loans

When it comes to running a successful business, one of the keys to managing your finances is to have a plan that takes into account any potential cash flow issues that may arise in the future. As every business has different functionalities, understanding the nature of your business will help you formulate a plan most suited to your business needs. This will allow you to start initiating loan applications when your company is financially stable.

Unfortunately, many companies only seek funding help when they face financial difficulties. As capital loans are based on your repayment ability, there is a chance that capital loans can be declined by lenders at the time you may need it most. Hence it is always advisable to seek these financing options when your company is in its best financial shape.

 

 

Where To Apply For SME Capital Loans

There are several options when it comes to choosing where you want to get your capital loan or term loan in Singapore.  SME capital loans in Singapore are usually offered by banks, financial institutions or alternative lenders.

Banks in Singapore provide various SME capital loan options, however, obtaining approval can be a tedious process for many SMEs. Another option SMEs can look at would be financial institutions that usually function as specialised lenders and have loans suitable for asset-based lending such as equipment loans.

ETHOZ Capital is a participating financial institution for the Enterprise Financing Scheme (EFS) under Enterprise Singapore. The aim of this partnership is to offer SMEs a variety of loans such as the Working Capital Loan, SME Fixed Asset Loan and the Temporary Bridging Loan.

 

 

Types of SME Capital Loans

 

Working Capital Loans

For SMEs that are looking for a source of funding to finance your daily operations, a working capital loan is the most suitable option. At ETHOZ Capital, the working capital loan scheme is targeted at SMEs that have a group revenue of up to $100 million or a maximum employee count of 200. For companies that are eligible, you can apply for a loan amount of up to $1 million dollars.

 

SME Fixed Assets Loan

If you’re looking for a loan to finance the investment of domestic or overseas fixed assets, the SME Fixed Assets Loan will be a suitable option for you. The SME Fixed Assets Loan can be used for the purchase of equipment for upgrading purposes as well as construction or purchase of government and commercial built premises for your business. If you are eligible for this loan, you can secure up to $30 million dollars.

 

Temporary Bridging Loan

The Temporary Bridging Loan Programme (TBLP) provides access to additional working capital for SMEs to fund their business needs. Under this scheme, eligible companies can secure a loan amount up to the $5 million dollars with an interest rate capped at 5%. To help manage debt and control cash flow, companies can also apply up to 1-year deferral of principal repayment,  subject to assessment by the Participating Financial Institutions.

 

Working Capital Loan Singapore

Even with a variety of options to choose from, navigating your unique needs and challenges to identify a capital loan that best works for your business can be rather challenging. If you need some assistance in further understanding your options, our experienced relationship managers can help you out with this and recommend a financial solution, after considering your requirements. Simply give our team at ETHOZ a call at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

What is a Temporary Bridging Loan & How Will it Help Local Businesses?

As the COVID-19 pandemic continues to curtail economic activity in many parts of the world, the falling external demand coupled with factors such as supply chain disruptions has led to an overall contraction of Singapore’s economy. This has caused many SMEs in Singapore to bear the brunt of the economic fallout especially with customers staying home, resulting in reduced spending globally.

With uncertain times ahead of us, many SMEs in Singapore will continue to face financial constraints when it comes to maintaining their cash flows and meeting their financial obligations. For companies that are reviewing their current cash flows and exploring financing options in Singapore, there are many measures introduced by the government to help businesses address their urgent financial concerns. If you’re looking for a financing option to help manage any urgent business needs, the Temporary Bridging Loan Programme (TBL) will be a suitable option for you. Keep reading to find out everything you need to know about this scheme.

 

 

The Temporary Bridging Loan Programme (TBL)

The Temporary Bridging Loan Programme (TBL) is a government-assisted financing scheme for SMEs in Singapore, introduced in Budget 2020. This scheme is available to all sectors and provides working capital to fund your business needs given the current economic climate in Singapore.

 

 

Eligibility

In order to be eligible for this scheme, you have to be a business entity registered and physically present in Singapore with at least 30% of equity held by Singaporeans or Permanent Residents residing in Singapore. Do note that the approval of the loan will be decided after an assessment by the Participating Financial Institutions (PFI) involved in the scheme.

 

 

Features

The Temporary Bridging Loan provides working capital funding of up to $5 million to help you with your business needs. The interest rate for this will be capped at 5% effective p.a., from the PFIs. Enterprise Singapore also provides a 90% risk-share on the loans for any new applications that are initiated from 8 April up till 31 March 2021.

SMEs can even apply to defer their principal repayments for up to 12 months to assist them in managing their debt. This deferral will also be subject to approval by the PFIs after further assessment.

 

 

How To Apply

Currently, there are 15 financial institutions that are participating in this scheme. However, the credit criteria and interest rates may differ for each of the PFIs, which is why it is crucial to select a suitable PFI to avoid rejection of your application for the loan. SMEs in Singapore can also approach different PFIs to apply for multiple loans, However, do note that eligible companies can only borrow up to $5 million dollars even if you decide to obtain multiple loans from different PFIs.

In order to apply for the temporary bridging loan, simply approach the PFIs that are listed in this scheme to discuss your options. ETHOZ Capital is one of the PFis involved in the TBL and our relationship managers can provide you with detailed information on the loan rates as well as the eligibility terms to ensure that your application gets approved as quickly as possible — allowing you to tackle any financial challenges you are currently facing due to the COVID-19 outbreak.

 

 

How Will TBL Help SMEs

As the global pandemic caused by the novel coronavirus rages on, it is essential for companies to act fast and consider their financing options in order to persevere and tackle the economic crisis head-on. With the slowing economy, it is important for companies to strategise and manage their working capital efficiently — especially vulnerable businesses who are running on low cash reserves.

TBL was introduced by the government in response to the COVID-19 outbreak to help local businesses manage their immediate cash flow concerns. In times of financial instability, this scheme allows SMEs to shift their business priorities to addressing cash flow challenges and liquidity instead of merely focusing on profits and losses.

As the world adjusts rapidly to adapt to changing times, it has become more important than ever for businesses to stay relevant and this will be difficult to achieve if the company is faced with unstable cash flows. TBL helps companies out with this by addressing their most urgent business needs so that they can focus on other aspects such as adapting and reinventing to bounce back from this crisis in the long run.

 

 

Financing In Singapore

As with most businesses in Singapore, navigating financial obstacles to keep your operations running smoothly is not easy — especially in a time like this where the whole world has been plagued by economic inactivity. TBL scheme is a great opportunity for companies who’re looking for financing options to keep their business afloat.

If you’re unsure about the eligibility criteria and require assistance, our experienced relationship managers at ETHOZ Capital can help you out with this and guide you on what needs to be done for your loan application to be approved quickly. Simply give our team at ETHOZ a call at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

 

 

Hire Purchase or Leasing of Equipment in Singapore: The Pros & Cons You Should Know

Many companies in Singapore need access to expensive equipment in order for their businesses operations to run smoothly. However, purchasing equipment in Singapore can be a daunting, not to mention pricey affair. Other options include leasing the equipment you need or acquiring it through hire purchase-but what does that entail?

If you’re looking for a long-term and cost-effective solution for your business needs, leasing and hire purchase are some great alternatives to consider! While both provide you with long-term usage of essential equipment for your business, they have very different implications on your finances and needs. If you’re unsure which would work better for you, fret not! We’ve put together this comprehensive guide exploring what these options entail and the benefits that come with them.

 

What is Leasing & Hire Purchase?

Leasing is essentially a method of renting an asset over a specified period of time for a fee, just to help your business advance to the next level. At the end of the lease agreement, you will have to return the equipment back to the rental company in its original condition.

On the other hand, hire purchase allows the hirer to acquire and utilize highly-priced equipment on their terms. Usually, an initial down payment is required followed by monthly payments for the fixed period. After all repayment terms are fulfilled at the end of the rental period, the hirer has the option to own the asset.

 

 

Pros of Leasing

 

 

1. Greater freedom and flexibility 

Leasing an asset is especially useful when you’re not 100% sure that you will need it in the long-run. Moreover, leasing eliminates the risk of asset obsolescence, as you won’t have to worry about the equipment’s disposal at the end of its useful life. You have the flexibility to decide when you want to return it to the rental company (preferably when the equipment becomes unnecessary to your business operations), passing on the burden of obsolescence onto the lessor, freeing yourself to lease new, higher-end equipment.

 

 

2. Lower monthly payments with low or no downpayment

Equipment leasing is an efficient way for new, growing businesses to get hold of the tools they need. If you are the owner of a small business enterprise or an entrepreneur, you may not have the capital to purchase equipment. In that case, leasing is definitely the more cost-effective option as it allows you to acquire equipment with minimal initial expenditures.

We have professional relationship managers at ETHOZ that will analyse your specific equipment needs and budget to propose a customised equipment leasing programme which will allow you to make affordable monthly payments over time. This way, you get to save your working capital for business expenses and expansion, which would otherwise be used up making cash payments for your equipment.

 

 

3. Easier to upgrade your equipment

Leasing makes it easier to upgrade your equipment depending on the needs of your business and how you structure your lease. For example, if you need a piece of certain equipment at the moment, but know that a newer and better model will be released in 1 year, you may sign a leasing agreement for a one-year term. That way, you’ll be able to trade in your old model and upgrade it to the new one at the end of your lease.

 

 

Pros of Hire Purchase

 

1. Customised repayment amounts

Be it small-scale local enterprises, businesses, or entrepreneurs, you will be able to operate your asset from the onset and generate revenue while paying for the equipment on a regular instalment basis over a fixed repayment term, maximizing working capital. At ETHOZ, we offer a flexible frequency of instalment payment terms to make budgeting easier for you. The payment terms may be monthly, quarterly, half-yearly, or annually, as per the terms of the agreement. Each rental payment is considered as a charge for hiring the asset.

 

2. Ownership of the asset

Hire purchase ultimately differs from equipment leasing with respect to the choice of ultimate ownership of the asset. At ETHOZ, we promise a hassle-free customer experience in helping you achieve that if you wish!

With simple and efficient application procedures and fast approvals, equipment bought on hire purchase will be accessible for use almost instantaneously without payment of the entire price. This makes it the most suitable for the purchase of expensive assets.

Moreover, before the completion of the repayment term, the hirer has the flexibility to terminate the agreement if they do not wish to acquire its ownership rights.

 

Hire Purchase or Leasing of Equipment in Singapore

If you’re looking for highly-priced equipment to boost the productivity of your business operations, it may be confusing — especially with so many things to look out for when it comes to either obtaining the asset through hire purchase or leasing. If you’re still having trouble deciding which would best meet your needs, simply give our team at ETHOZ a call at 6654 7799! You can also drop us an email at contactus@ethozgroup.com today!

 

 

3 Ways a Term Loan Secured with Property can Help Your Business

Starting your own business has become a dream that many Singaporeans are able to call a reality. But with new business ventures come both risk and reward. That’s why it is not uncommon for small businesses or startups in Singapore to require some form of financing, in the form of term loans. If you’re looking to learn more about what term loans are and how they can benefit your business, read our simple introductory guide to secured term loans in Singapore.

 

 

What is a term loan and what does it mean to have it secured with a property?

In layman’s terms, a term loan is a deal between a lender and a borrower. The lender provides a sum of cash up front and receives that cash back in the form of repayments, with interest, over a fixed period of time. Term loans are especially useful for businesses to purchase fixed assets such as equipment for production processes, as these allow for the generation of profit while the loan is being repaid.

A term loan secured with property, in particular, refers to the personal asset (your property) / company fix asset (property) being used as loan collateral. The lender will have legal mortgage over your property until the loan you have taken is repaid. This means, if you fail to make your repayment, the lender has the legal right to seize and sell your property in order to fulfil your repayment.

 

 

What is the difference between secured and unsecured term loans?

 

Advantages of secured loans:

 

1. Lower risk for the lender

One of the benefits of a secured term loan is that it presents a lower risk for the lender because the asset ensures repayment in the event of a default. A default refers to a failure to meet the legal obligations or conditions of a loan.

 

2. Lower interest rates for the borrower

Another benefit of a secured term loan is a complement to the low risk the lender faces. Lenders are thus more willing to lower their interest rate.  Lenders will also be more willing to extend a longer repayment period resulting in lower monthly instalment which is beneficial in helping your business manage funds in the present day.

 

3. Larger amounts can be borrowed

More money can be borrowed together with the flexibility of having longer periods for repayment. This is also partially due to the lower risk the lender faces, as valuable personal assets such as property are used as collateral for the business loan.

 

 

Advantages of unsecured loans:

 

1. Personal / Company assets need not be used as collateral

Unsecured loans are issued on the basis of the borrower’s capability to repay the loan without pledging a valuable asset such as your property as collateral.

 

2. A more hassle-free process

The application process for an unsecured loan usually goes much more quickly than a secured loan, as long as you or your business reflects a high credit score. You will be required to provide information about your savings, income, employment, or credit history.

 

 

How does a term loan secured with property help your business?

 

1. Increase liquidity

Some businesses in Singapore experience low liquidity, being short on cash and unable to pay off short-term debts such as taxes or payment to suppliers. Term loans secured with a property are particularly helpful for businesses in tight cash situations with valuable properties at their disposal. If you do not wish to sell and downgrade your property for cash, a term loan secured with property may be the solution as it allows you to get money out of your house without having to lose it.

The loan amount is established by the value of your property, which will be determined by an appraiser from the lending institution. If the value of your property increases over time, you may be able to request for a higher term loan, using the equity of your property as collateral.

 

2. Affordable repayment

The loaning institution will feel a lot more secure knowing that you won’t be able to just pack up your property and hit the road. With something they can foreclose on, term loans secured with a property are thus considered low-risk. This means that businesses will be able to take bigger loans with lower interest rates! With the capacity to take big loans without worrying too much about high-interest repayment terms, you will be able to focus on your business operations with a peace of mind.

 

 

Reliable term loans in Singapore

As with most businesses, navigating financial challenges is not easy and a lot goes into working towards and achieving one’s business goals. However, in some cases, the solution may not be straightforward. ETHOZ Capital provides businesses with easy access to additional funds from working capital loans to property mortgage loans at competitive interest rates, so that you may fully focus on growing your business.

If you require assistance, our experienced Relationship Managers can help you out with this. Simply give our team at ETHOZ a call at 66547799 or drop us an email at contactus@ethozgroup.comtoday!