Guide to Funding Societies in Singapore

Alevin Chan

Alevin Chan

Last updated 04 June, 2024

Since 2015, Funding Societies has been providing business loans and financing schemes to SMEs. Learn more about Funding Societies’ products and services, eligibility requirements, and maximum loan amounts. 

Local micro-enterprises and SMEs seeking business loans and commercial financing options often turn to banks. However, bank commercial loans may be difficult to qualify for, and some loans can come with high interest rates.

As an alternative, entrepreneurs, start-ups and SMEs can look towards Funding Societies, which offers a range of business loans and financing options catering to micro and small business enterprises in Singapore and nearby regions.

This guide explains what service Funding Societies provides and how they work. 

Table of contents:


What is Funding Societies?

Funding Societies (FS) is a debt investment platform that provides loans and financing solutions to small businesses and SMEs in the region. Their target audience ranges from entrepreneurs and sole proprietors to small listed companies. 

FS was established in 2015 with the mission to help encourage private enterprise by enabling fast and seamless access to funds for companies, while helping individual investors diversify and grow their portfolios with investment in Singapore and Southeast Asia’s vibrant SME sector. 

In other words, FS offers loans and financing to SMEs and also allows investors to participate in providing loans to enterprises. Investors can sign up for an FS account and browse the loan opportunities that are currently available. Investment in each business opportunity starts from S$20 each, with loan terms ranging from six to 18 months. 

For the rest of this article, we will be focusing on how FS can benefit small businesses and SMEs with their business loans and financing solutions.


What SME financial solutions does Funding Societies Singapore offer?

Microloans

Loan up to: S$150,000

Eligibility:

  • Singapore registered business entities
  • 6 months minimum operating history
  • Minimum 30% local shareholding

Microloans are small-sized loans from S$10,000 to S$150,000, designed for startups and micro-enterprises. It can be used for any business purpose with no restriction, including business expansion, refurbishment, purchasing inventory and more. 

No collateral is required for a microloan, and maximum loan tenure is 18 months. FS does not charge early repayment fees for this loan. 

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SingSaver Exclusive Promotion: Enjoy the following rewards when you sign up for an HSBC Personal Loan:

Receive an Apple iPhone 15 Pro 128GB (worth S$1,460) or an Apple iPad Air 13" Wifi 128 GB (worth S$1,199) or a Xioami TV Q2 65" (worth S$654.30) or an Ergotune Joobie (worth S$599) or a Dyson V8 Slim Fluffy (worth S$509) or S$1,000 cash when you get approved for a loan of min. S$10,000 with tenure of 3 to 5 years. Valid till 22 July 2024. T&Cs apply.

Plus, get an additional S$50 eCapitaV when you apply for the loan and complete the SingSaver Rewards Redemption form. Valid till 22 July 2024. T&Cs apply.

Business term loan

Loan up to: S$100,000 to S$1 million

Eligibility:

  • Singapore registered business entities
  • Minimum 30% local shareholding
  • More than 1 year operations, with over S$500,000 annual turnover 

FS offers business instalment loans on unsecured terms and fixed monthly repayments. There are two such loans available.

The Business Term Loan PRO provides between S$100,000 to S$300,000 in funding, over loan tenures of 12 to 36 months. There’s an origination fee pegged at 3.5%. 

Meanwhile, the Business Term Loan offers loans of between S$300,000 to S$1 million, with a loan tenure of up to 12 months. The origination fee for this loan is 5%. 

Note that only Singapore-registered Pte Ltd and LLP companies are eligible for Business Term Loans. Sole Proprietors will not be able to qualify for this loan. 

Accounts payable financing 

Tenor up to: 90 days, with 100% payment

Eligibility:

  • Singapore Registered Business
  • Only Pte Ltd Co or LLP Incorporated with operating History for more than 12 months
  • No more than 30DPD in current or previous loans/facilities with FS

Accounts payable (AP) financing is a business financing service in which FS pays for your invoices owed to suppliers and vendors first. You then have up to 90 days to pay FS the amount paid on your behalf. 

This allows SMEs to unlock their working capital and make larger purchases to enjoy economies of scale. AP financing can also be helpful to bridge temporary gaps in cashflow for businesses operating in cyclical sectors. 

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⚡#ScoreBigSummer Flash Deal⚡: Be one of the 20 winners with the most inspiring summer stories and SingSaver will get your interest covered for 2 years (up to S$1,200 ecapitaVoucher). Simply apply for any participating loan product and share with us why you're taking a loan this summer. Valid till 22 July 2024. T&Cs apply.

Singsaver Exclusive Offer: Receive the following rewards when you apply for an SCB CashOne Personal Loan.

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New Customers: Receive an Apple iPhone 15 Pro 128GB (worth S$1,664.25) or a Dyson V12 Detect Slim Fluffy (worth S$969) or an Apple iPad Air 11" Wi-Fi 128GB (worth S$899) or a Dyson V8 Slim Fluffy (worth S$509) or a Xiaomi TV A Pro 43 (worth S$479) or up to S$1,220 Cash upon loan approval when you apply for a minimum loan of S$8,000. Valid till 22 July 2024. T&Cs apply.

Existing Customers: Receive up to S$520 cash upon loan approval when you apply for a minimum loan of S$8,000 with a tenure of 3 to 5 years. Valid till 22 July 2024. T&Cs apply.

Plus, enjoy up to S$4,100 cashback when you apply for a min. loan of S$12,000 with a tenure of 3 to 5 years. Valid till 30 September 2024. T&Cs apply.

Accounts receivable financing 

Tenor up to: 120 days, with 80% of invoice value 

Eligibility:

  • Singapore Registered Business
  • Minimum 30% shareholding by a Singaporean Citizen or Permanent Resident Director
  • 6 months minimum operating history

In accounts receivable (AR) financing, companies can “convert” their invoices to cash upfront, instead of waiting for payment by customers. In essence, this is like borrowing against the value of payments due to you but not yet paid. 

AR financing provides up to S$1 million credit line, and pays out on up to 80% of the value of the invoice. This service caters to SMEs with a steady stream of recurring invoices that require cashflow upfront. 

Revolving credit line

Loan up to: S$100,000 

Eligibility:

  • Singapore Registered Pte Ltd and LLP companies
  • Minimum 30% local shareholding 
  • 3 years minimum operating history with an annual turnover of at least S$1.2 million

A revolving credit line offers extra cash flow that can be drawn down whenever necessary. It comes with an annual facility fee, and interest – 1.5% per month for the first 12 months – is only charged on the amount drawn down. 

This is one of the more flexible business-financing tools available, as the funds are available without a time limit. Also, instead of fixed monthly payments, you can choose to pay only the monthly interest charges, pay off the entire balance, or anywhere in between. 

Property-backed Secured Financing

Loan up to: S$3 million, or 80% of the property’s value

Eligibility:

  • Singapore Registered companies
  • Minimum 30% local shareholding 

Property-backed secured financing allows SMEs to borrow against the value of properties that they own. Up to 80% of the property’s value can be converted to a cash loan, capped at S$3 million per loan. 

This, of course, requires businesses to own properties that they can borrow against. However, by using the property as collateral to secure the loan, SMEs can enjoy lower interest rates than unsecured business term loans, as credit risk is lower. 

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⚡#ScoreBigSummer Flash Deal⚡: Be one of the 20 winners with the most inspiring summer stories and SingSaver will get your interest covered for 2 years (up to S$1,200 ecapitaVoucher). Simply apply for any participating loan product and share with us why you're taking a loan this summer. Valid till 22 July 2024. T&Cs apply.

SingSaver Exclusive Promotion: Enjoy the following rewards when you sign up for a CIMB Personal Loan:

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Receive an Apple iPhone 15 256 GB (worth S$1,427.50) or an Apple iPad Air 11" Wi-fi 256 GB (worth S$1,049) or a PlayStation 5 (Disc Version) (worth S$799) or a Dyson AM07 Tower Fan (worth S$459) or up to S$1,220 cash when you get approved for a CIMB Personal Loan with a min. loan amount of S$8,000 and tenure of 3 to 5 years. Applicable to new customers only. Valid till 22 July 2024.  T&Cs apply.


How to be eligible for funding by Funding Societies?

In general, SMEs need to be Singapore-registered and have at least 30% local shareholding (i.e., Singaporeans or PRs owning at least 30% of the company) to be eligible for the various funding schemes offered by FS. 

There are also further requirements on how long the business has been in operation, as well as thresholds for annual turnover in revenue. These differ according to the type of SME financing product you choose. 

To help you determine which FS loan product to choose, you can go through the Eligibility Assessment Quiz. Alternatively, reach out to FS and request a discussion on your needs via tel: +65 6011 7534 or email: info@fundingsocieties.com.


Frequently Asked Questions (FAQs)

Are Funding Societies regulated by MAS?

Funding Societies is regulated by the Monetary Authority of Singapore (MAS). It holds a Capital Markets Services Licence for the regulated activity of dealing in securities under the Securities and Futures Act (Cap. 289) of Singapore.

What do Funding Societies do?

Funding Societies is a business and SME financing platform that provides loans and other financial solutions to micro, small and medium enterprises in Singapore, Malaysia, Indonesia, Thailand and Vietnam.

How much is Funding Societies withdrawal fee?

There are no charges for withdrawals made from your Funding Societies account. You can withdraw up to your total available balance and make as many withdrawals as you like.

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⚡#ScoreBigSummer Flash Deal⚡: Be one of the 20 winners with the most inspiring summer stories and SingSaver will get your interest covered for 2 years (up to S$1,200 ecapitaVoucher). Simply apply for any participating loan product and share with us why you're taking a loan this summer. Valid till 22 July 2024. T&Cs apply.

SingSaver Exclusive Promotion: Enjoy the following rewards when you sign up for a UOB Personal Loan:

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Receive an Apple iPhone 15 128GB (worth S$1,311) or an Apple Bundle: Apple iPad 10th Gen 10.9 wifi 256 GB + Apple Pencil (USB-C) (worth S$878) or Dyson Airwrap™ multi-styler and dryer (Complete) (worth S$859) or a Morning Coffee Machine + 20 Capsules Bundle (worth S$684) or a Sony WF-1000XM5 (worth S$429) or up to S$1,220 cash when you get approved for a UOB Personal Loan with a min. loan amount of S$8,000 and tenure of 1 to 5 years. Applicable to new customers only. Valid till 22 July 2024. T&Cs apply.

An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.

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