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Internationalisation Finance Scheme For Singapore Businesses

Singapore-based companies looking into expanding their market overseas have a number of financing options available courtesy of the national government. Among these is the Internationalisation Finance Scheme or IFS, which provides assistance to companies in acquiring fixed assets to be used abroad or to finance working capital expenses for any of their overseas projects.

A total of S$378 million of IFS loans were approved in 2010, S$195 million in 2011, and S$121 million in 2012. Of all these, the infrastructure services sector received the bulk at 41 percent. The electronics and precision engineering sector, meanwhile, received 26 percent, while the lifestyle services sector was awarded 12 percent. Other sectors such as information communications technology, commodities and environmental services, and transport and logistics received 7, 6, and 2 percent, respectively. The remaining one percent went to the business services sector.

Apart from this, the Loan Insurance Scheme (LIS) is also available for companies looking into internationalisation and small and medium enterprises (SMEs). The LIS aims to provide these companies better access to working capital financing as well as trade financing by supporting insurance against default.

Total loans approved for this financing scheme reached S$2.3 billion in 2010, S$1.6 billion in 2011, and S$1.3 billion in 2012. The wholesale and retail trade sector received the majority of the granted loans at 62 percent, followed by the construction sector at 14 percent. The manufacturing sector claimed 13 percent while the services sector received 11 percent.

Applications to such loans are subject to the assessment of relationship managers of the participating financial institutions (PFIs). These relationship managers, at the expression of interest of a company to avail of such loans, conduct preliminary assessments of the company to determine advisability of application. Companies with at least 30 percent local shareholding and a group annual sales of not more than $100 million are qualified to apply.