Business Loans

Changing Small Business Financing in Singapore: The Lendingpot Way

Eric Koh
October 11, 2017

(Updated in 2020)

It has been almost 3 years since we wrote this article. However, Lendingpot’s vision and goals have not changed.

We have created a robust ecosystem for SMEs to search hassle-free for the best business loans in Singapore.

Please check out our published results and insights at Lendingpot’s Singapore SME Financing Report - 2019.


What are we trying to solve?

A realization struck me as I was prospecting a friendly ex-client. He lamented succinctly that the main problem plaguing small businesses in Singapore is actually the lack of qualified labour. The challenge of getting financing comes a close second.

Start-ups like Glints are trying to address the problems of labour and employment matching by providing disruptive services. At Lendingpot, we are attempting to do the same to the small business loan eco-system in Singapore.

Small businesses around the world face the same financing problems. Getting a business loan is both:

  1. difficult; and
  2. expensive.

                   

No smiles trying to get a loan in real life. Photo credit: stocksnap
No smiles trying to get a loan in real life.
Photo credit: stocksnap

         


1. Our expertise lies in financial innovation

中小型企业,融资难、融资贵。(SMEs financing is often both difficult and expensive)

The truth is, the SME segment is often viewed by the banking industry as a cash cow. Due to the lack of options in the market, business owners often find themselves accepting any offered loans at any price points.

In my opinion, there aren’t enough commercial entities that act to help SMEs in an affordable way. Government assistance schemes are also difficult to navigate and industry associations may not move as quickly as desired.

Lendingpot was conceptualized to address this problem by creating a Business Loan Marketplace.

                   

Imagine loans in place of apples. Photo credit: stocksnap
Imagine loans in place of apples.
Photo credit: stocksnap

         


2. Getting financing is easy if SMEs can choose from multiple business loan offers, proposed by experts

It is natural for relationship managers to prioritize their self-interest when proposing the latest promotional (read: highest commission) business loan product to you. It is up to business owners to decide if the suggested product can truly help your business.

However, business owners who choose not to accept the offer often do not have many alternatives, nor the time, to continue the search.

Lendingpot’s Business Loan Marketplace presents small business owners with multiple proposals from different financial institutions or banks with only one application.

This feature benefits small business owners by:

  1. educating them about the features of different types of business loan products;
  2. allowing them to understand how each business loan product can potentially help them;
  3. letting them know the loan amount and interest rates that they are eligible for in different banks/financial institutions; and
  4. saving them time from having to find out the above information by applying to banks/financial institutions individually.

If small business owners do not receive a loan offer from their preferred bank, their companies may not be eligible for it at that institution.

The marketplace is configured such that relationship managers can review the applicant’s business loan eligibility (but not their name and contact details), before any conversation.

This feature saves time for all involved, allowing for the efficient matching of banks and businesses.


3. Cost for financing can be reduced from increased competition

By placing multiple relationship managers (RMs) from different companies on the same platform, we incentivize competitive behaviour. Relationship managers will need to do more in order to win your business.

Because of how similar business loan products are, this will likely result in:

  1. Lower interest rates or fees. Competition will be on price point.
  2. Improvement in service standards.

Small business owners will thus enjoy higher satisfaction levels when searching for business loans now.

                   

Imagine the fruits as loan offers. Photo credit: stocksnap
Imagine the fruits as loan offers. Photo credit: stocksnap

         


Conclusion

We believe small business owners will benefit from the Business Loan Marketplace as we provide a level playing field for business owners to search for financing and shift the onus to the RM to offer better service and pricing.


Related articles:

5 Reasons Why You Can’t Get That Business Loan in Singapore 

4 More Ways to Improve Your Chances Of Getting A Business Loan in Singapore?

(True Or False) Having A Relationship With A Bank Will Make It Easier To Borrow in The Future


Request for a Business Loan Now!

Lendingpot.sg operates a Business Loan Marketplace that allows an SME to connect to multiple lenders with just one application, allowing the SME to know who its prospective lenders are and the rates that they offer, in a very short time.


Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.

About the author

Eric Koh is passionate about helping SMEs grow and has spent years interacting with business owners at OCBC and IFS Capital. He is interested in 70s rock ‘n roll, the odd novel and copious amounts of historical trivia.

SMEs
SME Loan
business
business loan
Financing
financial innovation

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