One of the major challenges that Singapore businesses have been facing in the last 2 years of the pandemic is workforce shortages, especially in the manufacturing, engineering and construction industries. Many in the mentioned industries were forced to stand down due to the spreading of COVID-19, resulting in many foreign workers having to leave Singapore. On top of this, Singapore’s international borders were also shut for a long period of time (from March 2020 to October 2021), putting more pressure on workforce availability.
As the Singapore economy is now in recovery mode, the international border is slowly reopening again. More contracts and projects are becoming available, ready for businesses to take on. So how best to manage this growth and working capital requirement that comes with it?
Securing funding for your contract or project
For the majority of contracts and projects, the customer only pays post-delivery of work and based on a predetermined schedule. Your business has to cover the initial cash outlay, including salaries, raw materials, and other operating expenses. So how will your business optimise cashflow requirements? There are a couple of ways to do this.
Securing a business loan
The SME Working Capital loan was initiated by the Singapore government aiming to provide financial support to local businesses with a loan of up to S$300,000 and a maximum repayment term of 5 years. Check if your business is eligible as this could be a good source of external funding to help support the initial cash outlay before getting paid by your customers.
Contract or project finance
For businesses who are foreign owned (less than 30% Singapore Citizen or PR shareholdings), SME working capital will not be available to your business. Your business may want to consider contract or project finance to help you tap into a source of funding, helping your business to optimise cashflow.
At InvoiceInterchange, we offer contract / project finance to help you better manage your business cash flow. Once the invoice is issued, your business will be able to receive up to 80% of the invoice value for a small fee. There are no lock-ins or minimum fees. You draw down funds as and when you need. Our customers love the flexibility that we offer.
To find out more about contract / project finance, talk to one of our friendly team members today.