Funding Societies’ Micro Loan vs. Term Loan

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Small and medium enterprises (SMEs) face more challenges when applying for business loans than larger enterprises. Indeed, a survey of MSMEs that secured financing from digital lenders shows that 74% of them could not secure a loan from traditional lenders.

That has created an over US$270 billion financing gap in East Asia and the Pacific that we at Funding Societies have made it our mission to fill. Here’s all you need to know about micro and term loans offered by Funding Societies.

What Is a Micro Loan?

Micro Loans, or micro-financing, are short-term loans providing flexible terms and quick approval times.They typically target SMEs with an urgent need for funding.

Funding Societies’ Micro Loan Offering

Funding Societies provides micro loan SME financing starting from S$3,000 and topping out at S$100,000. Micro Loans have a fast approval process and are easily accessible.

As a short-term loans Singapore lender, we at Funding Societies have made it easy to access unsecured micro financing. That means as a small business owner you can apply for one conveniently on your mobile phone or computer, something you typically cannot do with traditional lenders who need you to visit their physical branch.

Recognising that small businesses need funds urgently as working capital, the application process on our website takes no longer than a few minutes, and funds can be disbursed to qualified businesses within 24 hours of approval and offer acceptance. There are also no penalty fees for early repayments.

What Can a Small Business Use a Micro Loan For?

Small enterprises can put micro loans to many uses, including:

  • Working capital
  • One-off expenses
  • Expansion of business for a new office space or renovation
  • Refurbishment and funding of urgent projects
  • Inventory and supplies purchases
  • Improving cash flow for daily operations
  • Machinery and equipment purchases

Who Is Eligible for Funding Societies’ Micro Loans?

For your business to qualify for a Funding Societies SME micro loan, it must be a registered business in Singapore, and that goes for sole proprietorships as well. You must have operated for at least six months, and have a minimum of 30% local shareholding.

Now What Is a Short Term Loan?

Term loans, sometimes called term finance, are unsecured loans that borrowers will repay in equal monthly installments and at an agreed interest rate*. 

Funding Societies’ Term Loan Offering

Funding Societies issues two types of term loan financing between S$100,000 and S$2 million – Express Business Term Loan (BTL) and Business Term Loan.

  1. Express BTL
    1. Loan Quantum: S$100k – S$200k
    2. Processing Time: About 1 week
  2. BTL
    1. Loan Quantum: S$100k – S$2 million
    2. Processing Time: Up to 2 weeks

Note: other criteria may apply, depending on the customer’s industry.

Express BTL will appeal especially to younger companies as the documentation required is more straightforward with lower loan quantum. The larger loan quantum offered by the standard BTL is ideal for more established businesses with larger working capital requirements.

Some SMEs may not know this, but Funding Societies’ BTL can be repaid ahead of time with no early repayment fee! This allows SMEs to make payments whenever they are confident and comfortable, without the need to withhold payment and structure payment for the months ahead.

What Can a Small Business Use a Term Loan For?

A term loan Singapore borrower, similar to that of micro loans, can use the financing to expand their business, buy heavy machinery and equipment, purchase supplies, supplement working capital, and fund emergency projects.

Who Is Eligible for Funding Societies’ Term Loan?

A small business is eligible for short-term loans if it: 

  • Is registered in Singapore
  • Has been operational for more than 2 years
  • Has a minimum turnover of S$500,000 yearly
  • Has a minimum 30% shareholding by a Singapore citizen or Permanent Resident Director

Snapshot of Micro Loans vs. Term Loans

Funding Societies’ Micro Loan vs. Term Loan

How to Apply

Here is the hassle-free process when applying for Micro and Term SME loans at Funding Societies:

1. Register as a borrower

Apart from providing your name and address, you will need to present several documents during the application process.

  • For micro loans: front and back image of your NRIC, bank statements of the latest six months (personal bank statements are sufficient for sole proprietorships), credit bureau report of guarantors with 30 days validity, and the latest two year NOA of the guarantors.
  • For term loans: latest two years’ financial statements, latest six months’ bank statements, and directors’ and shareholders’ NRIC or passports, credit bureau report, and 2-year NOA.

2. Offer review

Funding societies will review your application and be in touch to discuss your loan options. If you are satisfied with any of them, move to the next step: accept the offer.

3. Contract and disbursement

We’ll send you the contract, so you must sign and return it. After we receive the signed contract, we will release the funds to you within the stipulated number of days.

Are you interested in the Micro Loan or Term Loan financing options that Funding Societies offers? 

SME - Explore Now!

*Interest rates offered vary based on company risk profile and will be confirmed upon full document submission for credit assessment during loan application.
Micro Loans are fulfilled by FS Capital Pte. Ltd.
Term Loans are a product of FS Capital Pte Ltd and Funding Societies Pte Ltd.

Disclaimer: The information provided to you in this blog post is intended only for general information purposes only and does not constitute legal or other professional advice on any subject matter. The materials and the information provided are not intended to be and do not constitute an advertisement or solicitation. In no event will Funding Societies be liable to any party for any direct, indirect, incidental, special, consequential or punitive damages for use of such information by you or any unauthorised third party. 

Information in this article has been updated and accurate as of 8 May 2023.

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