Small and medium enterprises (SMEs) are an important part of Singapore’s economy. They comprise 99% of all the establishments and employ more than half of the workforce.

The SME criteria for schemes administered by SPRING Singapore as follows:

• At least 30% local equity;
• Fixed assets not exceeding S$15 million; and
• Employment size not exceeding 200 for services companies

In recent years, financial institutions in Singapore are placing greater emphasis on meeting the financing needs of SMEs.

Each financial institution has its own definition of SMEs and its own dedicated relationship managers, innovative treasury and lending products, and personalised services to cater to the needs of this segment. These services and product information are available on the websites of the financial institutions.

Forward:

With the economy on the upturn, many of our SMEs are riding on the wave of economic expansion and growing their business operations. Access to capital will allow them to further exploit strategic opportunities.

To enhance their chances of success in raising the necessary capital, SMEs need to strive to upgrade their financial management capabilities and improve their creditworthiness in the eyes of potential lenders and financiers.

Sound financial management will not only make an SME more attractive to lenders and investors, it will also free up cash resources within the business and reduce the reliance on external financing.

I hope this handbook will serve as a useful guide for SMEs to strengthen their financial capabilities and boost their competitiveness in today’s global business environment.

MR LEE YI SHYAN
Minister of State, Trade and Industry
Minister in-charge of Entrepreneurship
Chairman of Action Community for Entrepreneurship

Download Financial Handbook for SMEs

PDF format, 5.4MB.

Copyright 2007 © Action Community for Entrepreneurship, The Association of Banks in Singapore,
SPRING Singapore and Stone Forest Consulting Pte Ltd
Design and Production by Xpress Print Pte Ltd

Contents:

Foreword by Mr Lee Yi Shyan, Minister of State for Trade and Industry, Minister in-charge of Entrepreneurship and Chairman of Action Community for Entrepreneurshipt 3

Message from The Association of Banks in Singapore (ABS) 4
Message from Chio Lim Stone Forest 5
Types of Financing
• Introduction 7
• Your Financing Options 8
• Government Financing Schemes 11

Understanding the Language of Financial Institutions
• Different Viewpoints of the Entrepreneur and Financial Institution 12
• Case Study: Two Different Companies and Two Different Outcomes 15
• Lessons for Entrepreneurs 20

Managing Working Capital
• Cash – the Lifeline of Any Business 22
• Key Elements of Working Capital Management 22
• How to Calculate Your Business and Trade Cycles 26
• Working Out Your Working Capital Lines for Your Business 28

Managing Capital Expenditure
• Case Study: A Precision Engineering Services Company which Invested in a Large Factory 30
• Lessons for Entrepreneurs 34

Overview of Key Services and Financing
Products of Financial Institutions in Singapore 36
Glossary of Financial Terms 38

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