3 Alternative Ways for Singapore SMEs to Get Funding

Singapore’s economy faced strong headwinds in 2016 and most key business indicators and economists have expressed pessimism for 2017.

The Singapore economy is “in for a tough period that will last for a while,” said deputy prime minister Tharman Shanmugaratnam in September, 2016, adding that the government’s priority right now was to help small and medium-sized enterprises (SMEs) innovate and “commercialize their capabilities beyond Singapore to take advantage of the growing regional opportunities.”

In Singapore, the high interest rates for bank loans, suppliers tightening credit access and the need for more and more collateral have become challenges for SMEs looking to raise funding, according to a recent survey.

Lincoln Teo, COO of DP Info, told the Business Times in November, 2016: “Banks and institutions have become more cautious about lending to SMEs, and this is reflected in a higher cost of funds.”

He added that the lack of access to affordable financing can trap SMEs in a “downward spiral,” as they are unable to grow without more funds, but at the time unable to get funds without more growth.

In an economic slowdown, one can use the help of a consultancy firm to get pragmatic solutions to their business needs. Singapore’s Linkflow Capital Pte Ltd provides advisory services to SMEs and assists companies with business process outsourcing of accounting and finance functions. The company can also procure financing from capital providers and operates the portal SMELoan.sg which lets you compare Singapore’s business loans providers easily.

But as the struggle for SMEs to secure bank loans gets worse, what other options are there for those in need of funding?

Today, we look at three alternative ways for SMEs to raise funds while avoiding bank loans.



Crowdfunding, a form of crowdsourcing and alternative finance, is the practice of funding a project or venture by raising money from a large number of people, mainly through dedicated online platforms.

Crowdfunding has gained popularity in recent years, growing from 400 platforms in 2012 to over 2,000 platforms in 2016, according to the Huffington Post.

There are four types of crowdfunding: reward-based, equity-based, debt-based (also referred to as peer-to-peer lending), and donation-based.

A number of platforms are available in Singapore including MoolahSense, one of the leading players in the field, but also FundedHere, which focuses on equity crowdfunding and lending-based crowdfunding. FundedHere is known for being the first platform to get a license in Singapore.


Invoice trading

Invoice trading is the process in which SMEs auction their outstanding invoices to obtain immediate cash. It is a source of business finance, which allows businesses to access working capital that would otherwise be locked away for months.

SMEs can sell their outstanding invoices individually or in bundles to the bidders who offer the most competitive price to advance them the money.

Investors purchase a business’ outstanding invoices at a discount through an online market like InvoiceInterchange or SmartFunding. Other platforms available in Singapore include Capital Match, which also offers business and SME loans, and Capital Springboard, a newcomer that launched in June 2016.


Government schemes and grants

According to SPRING Singapore, an agency under Singapore’s Ministry of Trade, there are currently 180,000 local SMEs, making up 99% of the enterprises in the nation. These contribute to nearly half of the GDP and employ 70% of the workforce.

Considering the importance of SMEs in the local economy, the Singapore government has launched a number of financial schemes to support these companies.

These schemes include the government’s SME Micro Loans under the Local Enterprise Finance Scheme (LEFS) available to local SMEs with ten or less employees. These can apply for micro loans of up to S$100,000 for a repayment period of up to four years.

The SME Equipment and Factory Loan will provide companies financing of up to S$15 million to purchase equipment, machines or selected factory properties.

The SME Working Capital Loan, introduced at the Singapore Budget 2016, allows businesses to access unsecured working capital financing of up to S$300,000 to support their day-to-day business operations. The special program is running for a period of three years and will end in May 2019.

The SME Venture Loan enables innovative, high-growth companies to access alternative financing of up to S$5 million for the purpose of business expansion. It is part of the Venture Debt Programme which was launched in January 2016 and which will be running for a pilot period of two years.

For early-stage tech startups, SPRING and the Action Community for Entrepreneurship (ACE) offer a number of incubation and acceleration programs, as well as special grants such as the ACE Startups grant and the Technology Enterprise Commercialisation Scheme, which provides early-stage funding for proofs-of-concept and proofs-of-value.


Featured image: Singapore via Wikimedia.

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Traditional Insurance Companies Forced By Insurtech To Innovate In 2017

The insurance industry had given us amenities that we take for granted today. For instance, the fire station is the invention of insurance companies. After the Great Fire of London, insurance companies built the modern fire stations to fight fires against buildings which they insured. Over time, they pooled their resources together to form the


Source: Oxbow Partners


Traditional insurance companies are forced to innovate because the smaller and more nimble insurtech companies had reached the tipping point in 2016. If they don’t adapt to the new environment, it is clear that they are going out of business.

For those who are not familiar, insurtech companies combine technology to address consumer pain points and aim to deliver insurance faster and cheaper. As such, they post a major existential threat to traditional insurance companies such as Aviva.

Easiest Approach – Investing In Startups

The hands-off approach is one of the methods for traditional insurance companies to hedge against the insurtech. They have the one resource which insurtech startups lack: money. By pumping money into insurtech, they become the co-owner and can share the success of these startup.

They can also avoid the mess of having to change culture internally, change existing process and access better technology to benefit financially. As this is the easiest option, most established insurance companies would include in it their arsenal. They can do it directly with corporate venture capital or indirectly through external venture capital firms.

Slightly Harder Approach – Invest In Incubators and Accelerators

When the starts-up had grown to the stage where they are worthy of an investment, they had shown some level of success. Thus, they are priced higher. The other way is to incubate start-ups from their inception and gain a portion of their company for virtually nothing.

In exchange, the incubator had to provide the necessary resources (e.g. working space, mentors, etc) and the insurance company can keep its pulse on the latest innovation. Alternatively, insurance companies can also set up accelerators for companies had shown traction but not sufficient for investing.

Both are more expensive than direct investments into startups as they are more upfront cost with longer investment period before results are seen. They have to endure higher failure rates and compete against other incubators and accelerators in the market. Hence, this is the slightly harder approach.

Most Difficult Approach – Transform Your Company Internally

As with most established companies, inertia is a major problem. It is a feat of leadership to convince employees that they have to change their way of working when everything seems to be working well. Even after they are convinced, it is a totally different issue to implement it. This makes it the most difficult approach.

The relatively easier way is to buy technology products from external vendors. They have readily made solutions (e.g. Technology buffets) to implement into systems. The challenge is to choose the right system and to implement it properly.

Otherwise, incumbents can choose to build their own systems by creating innovation centres, build their own technology and digital proposition with their own digital labs. Innovation centres identify the required solution and budget has to be set aside for the technology building. A development framework has to be in place to transform ideas into reality. Digital labs are built to insulate the technologist and managers from the workload of daily routine.


The incumbents are now in the process of innovation which should benefit consumers. Will they combine their efforts like how they did it for fire bridges in 1865? The bigger question would be whether they will be successful.

If they are not able to innovate successfully, they will create the space for a startup to rise like how Google came to dominate the search engine sector. The stakes are high and we will see who will emerge victorious in the years ahead.




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Blockchain Based Lifeforms

The art collective Okhaos has applied blockchain to create life. The Plantoid is a robot plant sculpture to which you can pay bitcoins to help it employ artists to replicate itself through use of smart contracts. It is set up to own itself, process energy, act autonomously and reproduce which are the essential features of life.

Spans the virtual and physical worlds, it is an example of a Distributed Autonomous Organisation (DAO). These systems open the door to organisations run exclusively by machines as well as Pandora’s box of legal issues. The plantoids are unlikely to cause legal problems however as their primary purpose is aesthetics but it’s not a stretch to imagine DAOs reaching beyond the realm of art.

The main interest to me is that I have made biomimicry workshops my focus in 2017 and this represents a leap in my research material for the workshops I run. Biomimicry is the study of nature in creating insights for human design. The planetoid is a bold step in exploring how nature can assist in evolution of human creations.

The other main lesson for me is that the art world leads ahead where business can’t pioneer and that this promotes the case for investing in art based projects for organisations looking to innovate.

Find out more at www.okhaos.com/plantoids

Max Kalis,


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Banking on a Digital Transformation Strategy? These 4 Steps Can Help.

The “innovate-or-die” mantra is even more resonant in the banking industry than most. That’s why finance companies, faced with the possibility that a young digital upstart could eat their lunch (as Uber has for taxis, and Airbnb for hotels), are investigating third-platform apps by the hundreds.

On the lending side, for example, new consumer platforms such as Prosper, Lending Club and Marlette Funding have left traditional banks suddenly playing catch-up on using digital technology to improve customer experience and gain digital efficiencies (full disclosure: Marlette Funding is a client of my firm).

Meanwhile, the era of Facebook and Twitter has ushered in a new desire by customers to use their smartphones for both communications and conducting business wherever and whenever they want, and they expect the companies they do business with to keep up. Companies are keenly aware that they need to accelerate their ability to attract and retain customers.

Done properly, a strategic digital transformation can help banks meet the evolving needs of their customer base. It can also help reduce expenses and optimize lending practices that enable them to offer their customers benefits like lower fees and lower rates.
Through our experience with financial institutions, we’ve identified four key steps to smooth the transition from legacy processes and systems to cutting-edge digital solutions:

  • Step #1 – Understand Customers’ Wants and Needs
    We live in a world where consumers expect a high-quality user experience from digital applications, and they expect to derive personal benefit from using them. If they aren’t getting those things they simply won’t use them. One of the biggest reasons digital initiatives sometimes fail is that businesses neglect to really understand what customers want. So before embarking on significant changes, banks should take time to talk with customers to understand their pain points, explore the types of digital services they are interested in and learn how they would use these the services in their daily lives.
  • Step #2 – Develop Product(s) to Address Customer Pain Points
    One of the benefits of developing digital products today is that it’s relatively easy to create an early prototype and put it in front of customers for their input. The prototype should offer a fully clickable representation of the intended offering that allows customers to test its functionality and developers to learn more about how they use it. This continued user input will enable the software developers to create a feature set informed by the user experience as they begin writing the actual software code.
  • Step #3 – Employ Fast, Iterative Development
    Whether relying on an in-house team or an outside consultant, banks must take advantage of the fast, iterative development that will enable them to go from concept to commercial deployment in a matter of months, not years. Not too long ago, this would take several years and cost millions of dollars. But today, new software tools and an agile methodology are shrinking both time to market and budget requirements to undertake such dramatic changes. Features and functionality once requiring tens of thousands of lines of code now can be done in a single line of code that calls an existing package. Plus, developers can leverage current solutions that years ago required complex, custom software development.
  • Step #4 – Roll Out Digital Products on a Phased Basis
    Banks should not feel pressured to release a full product to all customers on day one. You may want to start with power users or targeted members for a trial period, before expanding it to the entire customer base.


One advantage of an online platform is that features and functionality can easily be added at any time. When introducing something new, it’s easier for customers to grasp just a few new features at first, adding more features once customers are accustomed to the initial changes. This phased approach also enables developers to study how users interact with the first features, enabling them to adjust follow-on features accordingly.

Banks were one of the first industries to adopt computers in the 1960s. Today, as the banking business is being revolutionized again by digital technology, following these four steps can help you roll with the changes and come out ahead. You can bank on it.

Bret Waters,


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Looking for Automatic Enrolment help?

The Pensions and Lifetime Savings Association (PLSA) set up Pension Solution to specifically help small employers navigate automatic enrolment. The PLSA is an independent not for profit organisation uniquely positioned to offer impartial services, and has ninety-years expertise in helping employers manage pension schemes.

If you are a small business looking for help with automatic enrolment, or you know a small business that could benefit from some face to face training, join us at our next half day training course taking place on Monday 20th February 2017 from 14:00 to 17:00 in central Leeds. To find out more and to register your place please see Pension Solution’s useful resources section: https://www.pensionsolution.co.uk/

Pension Solution also offers a step-by-step guide for busy small business owners on automatic enrolment – from what needs to be done by when, to how much it will cost and which employees must be enrolled.

Pension Solution helps in three easy steps:
1. A step-by-step guide to automatic enrolment
2. An impartial guide to pension providers
3. Useful resources including templates

The Fintech Times readers can SAVE 100% (normal price is £49+vat for one year) on joining using code FNT2017 until 15th February 2017.

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Moneymailme app launches video calls with cash transfer in world first

London, 9th of January 2017. The social money transfer app Moneymailme has released the fintech industry’s first app to offer video calls with cash transfer capabilities.

In launching its new service, Moneymailme joins the small group of global innovators providing video call services in apps and provides a world first by allowing money exchange to take place with the video messaging.

Moneymailme combines social interaction with the instant sending and receiving of e-money in over 130 countries. Consistent with Moneymailme’s signature features, the new function is seamless and can be used by all Moneymailme users on iOS and Android.

The feature comes as video calling in messaging apps is on the rise. While smartphones introduced the video calling feature with dual-camera phones, the concept had a hard time taking off due to high data costs and connectivity issues. Now with most phones now sporting 4G technology, video is gaining ground rapidly. By 2020, 75% of the world’s mobile data traffic will be video and mobile video will grow at a rate of over 60% between 2015 and 2020.

Moneymailme CEO Mihai Ivascu said: “We tend to think that money is an impersonal gift, but that isn’t so. A video message to a family member, friend or colleague with a bit of cash is about as personal as it gets.


“The adoption rate of mobile video is already increasing at a dramatic pace and the future of payments will centre on video.”


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