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Local Enterprise Finance Scheme for Small and Medium Enterprises

TheLocal Enterprise Finance Scheme or LEFS is one of the several financing options available for small and medium enterprises based in Singapore. This scheme allows loans of up to S$15 million, that can be used for various company purchases and upgrades.

SMEs that are interested in applying for the scheme must be locally-owned, with at least 30 percent local shareholding. Applicants must also have a Group Annual Sales that does not exceed S$100 million, or a Group Employment Size that does not exceed more than 200.

Fulfillment of such criteria will be assessed based on a group computation. Applicable interest rates range from 4.75 percent to 5.25 percent for a four-year loan tenure. A Participating Financial Institution or PFI will be responsible for such assessment.

Companies interested in applying for this finance scheme are encouraged to consult PFIs first. It is the job of PFIs to conduct the initial assessment of a company to determine their qualification for the financial scheme. Those who receive a go signal from PFIs need to prepare a copy of their business profile from the Accounting and Corporate Regulatory Authority (ACRA), as well as audited accounts or certified financial statements. Bank statements and personal income tax assessments of owners and directors will also be needed.

It will take about three (3) weeks for a bank or financial institution to reply to applications. The bigger the loan, the longer it may take to process it. As soon as a loan is approved, recipient companies must make repayments on time (these start a month after the release of the loan).

Some of the PFIs include the DBS Bank Ltd, Maybank, Oversea-Chinese Banking Corporation Ltd, RHB Bank, Standard Chartered Bank, The Bank of East Asia Ltd, The Hongkong and Shanghai Banking Corporation Ltd, and United Overseas Bank Ltd.