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Loan Application in Singapore

Loan Application in Singapore

Regulations for obtaining a corporate loan in Singapore

The relation between banks and their corporate clients is regulated by the Commercial Code in SingaporeaCompanies in Singapore must abide by the Banking and Finance Act when applying for a loan. The legislation establishes clear regulations for business loan applications in Singapore. These are:

  • –          loans can only be granted based on a contract between the Singapore company and the bank,
  • –          all banks are required to maintain the secrecy of their agreement with the company,
  • –          banks are entitles to ask for securities in order to protect themselves in case of bankruptcy of the company.

Singapore banks are legally entitles to request a company applying for a loan to submit a possessory or a proprietary security. Pledges and liens are considered proprietary securities, while the ownership of property is considered a proprietary security.

For more information about regulations on business loan applications you can refer to our Singapore lawyers.

Types of business loans in Singapore

Due to the flexibility of the banking system and the commercial legislation, Singapore companies can apply for several types of loans depending on their needs. The commercial legal framework allows a company to obtain:

  • –          working capital loans for the financing of day-to-day business activities,
  • –          hire-purchase loans for buying equipment and machinery.

Working capital loans for Singapore companies can also be divided into:

  • –          factoring loans for trading debts,
  • –          short-term loans which cannot exceed one year,
  • –          overdrafts.

You can obtain more information about all the available types of corporate loans from our lawyers in Singapore.

Governmental loans in Singapore

Singapore companies wanting to obtain financing are also supported by the Government. Singapore small and medium-sized companies can apply for one of the following loans guaranteed by the Government:

  • –          the Local Enterprise Finance Scheme,
  • –          the Internationalization Finance Scheme,
  • –          the Loan Insurance Scheme.

Most Singapore banks collaborate with the Government in order to aid companies to apply for one of these business loans. For assistance in applying for corporate financing you can also contact our law firm in Singapore.