On the 11th of Sept 2018, Enterprise Singapore (ESG) held an event for the benefit of small business owners in Singapore. Lendingpot had the honour of being invited as one of the organizations to share our ideas and knowledge in the business financing ecosystem.
One common feedback that is regularly expressed by SMEs is the feeling of frustration. During the course of their business, many SMEs often find themselves requiring business financing, only to be told that their business is not eligible for it.
As stated clearly within the title of this event, ESG seeks to provide insights on how to improve the SME’s access to business loans.
3 insights that Lendingpot gleaned from this event
1. SMEs benefit when they are exposed to multiple lenders in the same place
Coincidentally, this is similar to the value proposition that Lendingpot intends to bring to SMEs, albeit in the digital sphere. In this event, we witness first hand how useful it is to the SMEs.
Business owners are able to receive business financing solutions/ideas when they present their businesses’ problems instead of being rejected or accepted when they apply directly with the bank, for a specific product.
2. Because government-backed business loans schemes cannot cover everyone
This means that not every single SME who applies for a government scheme will be granted a loan.
The government does not issue the loans directly to business owners because they do not have the infrastructure in place to do that. It is a natural extension then, to piggy-back on the banks’ to issue the loan.
Thus, in order to receive a government-backed loan; SMEs will have to pass the stringent credit scoring and criteria of the banks.
SMEs must then, either adapt to the banks’ criteria or find alternative sources of financing.
3. And other types of business financing can be complementary to the government-backed business loans
This event not only brings together different types of lenders in the same place (i.e. banks, financial institutions, P2P lenders), it also brings along lenders with different expertise and business financing solutions (i.e. asset-backed loans, invoice financing).
This gives small business owners some exposure to other possibilities of financing that could potentially solve their short or long-term problems.
Solutions such as invoice financing offered by financial institutions or peer-to-peer financing platforms may possess better value propositions for the SMEs.
Conclusion: SMEs benefit when government agencies are more proactive
This is an inaugural event that ESG has held that is directly related to SME business financing.
Considering the great benefit it brings to SMEs, we hope that subsequent events can involve more SMEs as well as lenders.
Here’s hoping that the government will continue to be proactive and do great work in its quest to aid small business owners.
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.
Connect with him via email@example.com