In a strategic move to bolster trade financing for Singaporean enterprises, the government has announced significant enhancements to the Enterprise Financing Scheme – Trade Loan (EFS-TL). These initiatives aim to provide businesses with improved access to capital, facilitating both domestic and international trade activities.​

Permanent Increase in Loan Quantum

Effective April 1, 2025, the maximum loan quantum under the EFS-TL has been permanently doubled to S$10 million per borrower. This substantial enhancement is designed to support enterprises in managing larger trade financing requirements, thereby enhancing their competitiveness in the global market. The decision to make this increase permanent underscores the government's commitment to sustained business growth and internationalization efforts. ​

Comprehensive Coverage for Trade Needs

The EFS-TL encompasses a wide range of trade financing needs, including:​

• Inventory/Stock Financing: Assisting businesses in purchasing and holding inventory to meet operational demands.​

• Structured Pre-Delivery Working Capital: Providing revolving working capital to support pre-delivery trade processes.​

• Factoring (With Recourse)/Bill of Invoice/Accounts Receivable Discounting: Enabling enterprises to manage cash flow by converting accounts receivable into immediate funds.​

• Overseas Working Capital Loan: Supporting Singapore-based companies in financing their overseas operations and expansion efforts.​

• Bank Guarantee: Offering guarantees to facilitate various trade transactions and contractual obligations.​

These provisions cover both domestic and international transactions, ensuring that enterprises have the necessary financial backing to operate effectively in diverse markets. ​

Risk-Sharing to Encourage Lending

To encourage financial institutions to extend credit to enterprises, Enterprise Singapore (EnterpriseSG) participates in risk-sharing arrangements:​

• Standard Risk Share: EnterpriseSG assumes 50% of the risk for eligible loans.​

• Enhanced Risk Share: A higher risk share of 70% is available for young enterprises (firms formed within the past five years with at least one employee and more than 50% equity owned by individuals) or those operating in challenged markets (countries with an S&P rating of BB+ and below, including non-rated countries), acknowledging the increased risks these businesses may face.​

It's important to note that while EnterpriseSG shares the risk, borrowers remain responsible for repaying 100% of the loan amount. In the event of defaults, participating financial institutions are required to follow standard commercial recovery procedures before claiming the unrecovered amount from EnterpriseSG in proportion to the risk-share. ​

Eligibility Criteria

To qualify for the EFS-TL, enterprises must meet the following criteria:​

• Business Registration: The entity must be registered and operating in Singapore.​

• Local Equity: At least 30% of the company’s equity must be held directly or indirectly by Singaporean(s) and/or Singapore Permanent Resident(s), determined by the ultimate individual ownership.​

• Group Annual Sales Turnover: The applicant's group annual sales turnover should not exceed S$500 million.​

These criteria ensure that the support is directed towards helping local enterprises grow and internationalise.

Conclusion

The permanent enhancements to the Enterprise Financing Scheme – Trade Loan reflect Singapore's proactive approach to supporting its enterprises in navigating the complexities of global trade. By providing increased financial support and sharing lending risks, the government aims to empower local businesses to seize growth opportunities and strengthen their international presence.

Apply Now!

Factorglobe enables businesses to convert unpaid invoices into immediate cash, providing up to 90% of the invoice value upfront. Additionally, our global reach allows access to buyers in over 70 countries, facilitating seamless international transactions. Explore Factorglobe's solutions to strengthen your cross border strategies and optimize your trade operations. If you are interested in applying for the EFS-TL for accounts receivable financing, contact us at info@factorglobe.com or click here to apply now!

Note: Factorglobe is a brand under IFS Capital Limited, a participating Financial Institution for EFS-TL.

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