Business Loans

Using PayNow Corporate To Improve SMEs’ Business Loan Eligibility

Bonnie Koh
August 31, 2018

PayNow Corporate was launched on 13/8/2018, as the corporate extension to the peer-to-peer transfer service PayNow launched by the Association of Banks in Singapore (ABS).

Singapore-incorporated companies can now utilize the PayNow infrastructure to pay or receive funds instantaneously; either by using their Unique Entity Number (UEN) or through QR codes.

PayNow Corporate and Business Loans

Most observers expect the launch of this service to make the process of transferring funds easier than ever before.

However, the team at Lendingpot believes that companies using this service may also find it easier to obtain business loans in the future, and here are 3 reasons why.


1. PayNow Corporate allows transactions to be more accurately tracked on bank statements

Currently, financial institutions find it difficult to accurately track and account for cash or cheque transactions as legitimate business transactions.

We believe the ease of using PayNow Corporate will replace cash and cheque transactions eventually. Gone are the days when credit officers have to individually identify cheque payments or receipts.

This will reduce confusion and allow financial institutions to clearly assess an SME’s true creditworthiness.


2. PayNow Corporate may replace “off-the-bank-statement” cash transactions

(Edited: 17th Sept 2018) Lendingpot found out that PayNow Corporate transactions will be chargeable to the SME for both incoming and outgoing PayNow transactions, while remaining free for peer-to-peer transfers.

We believe that this is the wrong move by the local banks and will impede widespread usage by companies. Cash will still be king in Singapore.

Small business owners often transact in cash as most corporate transaction services are chargeable, including services such as clearance of cheques, NETS or credit card payments.

Judging from PayNow (the peer-to-peer version), which was released earlier, we can reasonably expect PayNow Corporate to also be free.

If so, there will no longer be any disincentive for companies, especially small businesses, to move towards utilizing digital payments and bringing cash transactions into the banking system.

Once again, this will allow the banks to accurately determine credit scoring for small businesses for loan applications.


3. PayNow Corporate may eliminate the occurrences of “returned cheques”

PayNow Corporate is not only blazingly fast, it is also easy to use when compared to the usual payment methods such as GIRO or cheques. (see Fig 1 below)

However, the hidden advantage lies in the fact that there will no longer be any instances of returned cheques or failed GIRO transactions.

Businesses no longer need to worry about the possibility of receiving bounced cheques issued by their clients. This allows business transactions to be more secure.

On the other hand, SMEs that issue cheque payments that get returned due to insufficient funds are often marked down by the financial institution during the credit scoring for a business loan application.

By using PayNow Corporate, there will no longer be any returned cheques, as a transfer is not possible without sufficient funds in the account.

Thus, SMEs will be able to get a better credit score, which means an approval for a business loan application will be more likely.

Payment Type Receipt of Payment
PayNow/PayNow Corporate Uses mobile number and/or Singapore NRIC/FIN/UEN Scan SG QR Almost immediate, 24x7 basis
FAST Requires Bank Name and Account Number Almost immediate, 24x7 basis
Cheque Up to 2 working days
Interbank GIRO Up to 3 working days

Credit: The Associate of Banks in Singapore, PayNow


Who are the participating banks?

Currently, the seven banks that are participating in the PayNow Corporate service are:
• Citibank
• DBS Bank / POSB
• HSBC
• Maybank
• OCBC Bank
• Standard Chartered Bank
• UOB

In the later phase, Bank of China and ICBC will join in. Therefore, with the nine participating banks, PayNow has access to a massive banking customer base for e-payment in Singapore.

To register, businesses can simply check out the participating banks’ online portal on PayNow Corporate to fill in the necessary application details. Beforehand, businesses should visit www.uen.gov.sg to retrieve their UEN in order to start receiving funds using PayNow.


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

Bonnie Koh is passionate about designing and aims to create her own works reflecting her style. She studied Communication in Singapore Institute of Management – RMIT University. She secretly wishes to travel around the world in 80 days.

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