The temporary bridging loan (TBL) helps improve cash flow during uncertain times. With competitive interest rates and loan amounts of up to S$1 million, it’s an attractive option for many businesses needing financing.
However, not all businesses qualify. Strict eligibility criteria—such as revenue requirements and credit history—can make it difficult to secure this loan. If your application is unsuccessful, it’s important to explore alternative funding solutions.
So, how does the TBL work, and what should you do if you don’t meet the requirements? In this guide, we’ll break down everything you need to know about TBLs and the available alternatives to help you make an informed financing decision.
What is a Temporary Bridging Loan (TBL)?
A temporary bridging loan programme is a government-backed financing scheme in Singapore, introduced by Enterprise Singapore (ESG) to help SMEs address short-term cash flow challenges. This, aside from the SME working capital loan, provides affordable working capital with loan amounts of up to S$1 million at lower interest rates than traditional business loans.
Available through participating financial institutions and banks, the TBL is designed to support businesses in maintaining operations, managing expenses, or seizing growth opportunities during uncertain times.
Who is Eligible for a Temporary Bridging Loan?
To qualify for a temporary bridging loan in Singapore, businesses must meet specific eligibility criteria set by Enterprise Singapore (ESG). These include:
Business Eligibility Requirements
- Must be registered and operating in Singapore.
- Must have at least 30% local ownership.
- Subject to creditworthiness and financial history checks by participating banks and financial institutions.
Why Some Businesses Fail to Qualify
Despite its accessibility, not all businesses meet the requirements. Common reasons for rejection include:
- Insufficient financial records: Startups or businesses with inconsistent revenue may lack the necessary financial history.
- Poor credit rating: A history of late payments or outstanding debts can affect loan approval.
- Not meeting government criteria: Certain industries or business structures may not align with ESG’s financing guidelines.
It’s important to review your financial standing and records before applying. This can enhance your chances of securing a temporary bridging loan and help your business bridge financial gaps effectively.
What to Do If You Don’t Qualify for a Temporary Bridging Loan?
Not all businesses meet the eligibility criteria for a temporary bridging loan, but that does not mean financing options are out of reach. If your business does not qualify, it is essential to explore alternative funding solutions that can still provide the working capital needed to sustain operations or manage cash flow challenges.
Alternative Financing Options
1. Bridging Loans from Banks
- Unlike TBLs, non-government-backed bridging loans are offered directly by banks.
- These loans can help businesses cover short-term expenses but may come with stricter eligibility requirements and higher interest rates.
- Approval time may vary, depending on the bank’s assessment of your business’s financial health.
2. Bridging Loans from Licensed Moneylenders
- A more flexible and faster alternative for businesses needing immediate funds.
- Licensed moneylenders typically have less stringent eligibility criteria compared to banks.
- Loan approval can take as little as 24 to 48 hours, making it suitable for urgent cash flow needs.
Check out the table below to see further how bridging loans from banks and moneylenders compare to TBLs:
| Feature | Temporary Bridging Loan (TBL) | Bridging Loan (Bank) | Bridging Loan (Licensed Moneylender) |
| Purpose | Business working capital | Short-term financial gap (property or business) | Short-term financial gap (property or business) |
| Loan Amount | Up to S$1 million | Varies (typically up to S$500,000) | Typically up to S$200,000 |
| Interest Rate | Lower due to Singapore government support | Higher than TBL, varies by bank | Usually starts from 1% |
| Approval Time | Weeks | Several weeks, depending on bank’s review | A few hours |
| Repayment Period | Up to 5 years | Varies (typically 1-5 years) | Shorter tenure (1 month or until the property’s completion date) |
| Processing Requirements | Extensive documentation | Extensive documentation | Minimal documentation, faster approval |
| Best For | SMEs needing government-backed support with lower interest rates | Businesses that don’t qualify for TBL but meet bank lending requirements | Businesses needing fast, short-term funding with flexible terms |
By understanding these alternatives, businesses can make informed financing decisions and secure the necessary funds to keep operations running smoothly.
What is a Bridging Loan?
A bridging loan is a short-term financing solution designed to help businesses or individuals manage immediate cash flow needs. It serves as a financial bridge, providing quick access to funds until long-term financing is secured or an expected cash inflow materializes.
Notable Features
- Short-Term Nature: Typically ranges from a few weeks to a year.
- Rapid Access to Funds: Designed for urgent financial needs, offering quick disbursement.
Types of Bridging Loans
- Property Bridging Loan: This type of loan is useful for homebuyers and investors who need temporary funding while waiting for the proceeds from a property sale. It helps avoid rushed transactions and ensures better financial flexibility.
- Business Bridging Loan: Often sourced from licensed moneylenders, this loan provides businesses with short-term working capital to sustain operations. Unlike temporary bridging loans, which may be government-backed, business bridging loans are typically private arrangements with higher interest rates.
What to Expect When Taking a Bridging Loan from a Licensed Moneylender
When securing a bridging loan from a licensed moneylender, borrowers can expect a streamlined application process designed for quick access to funds. Unlike traditional banks, licensed moneylenders offer flexible eligibility criteria and faster approvals, making them a viable option for urgent financial needs.
Features:
- Fast Approval & Disbursement: Funds can be released within the day, ensuring minimal delays.
- Short Loan Tenure: Typically ranges from a few weeks to a year, depending on the agreement.
- Competitive Interest Rates: Licensed moneylenders offer bridging loans with regulated interest rates, typically ranging between 1% and 4% per month.
Eligibility & Requirements for a Bridging Loan
When applying for a bridging loan from a licensed moneylender, you must meet specific eligibility criteria and provide the necessary documents to ensure a smooth application process.
Eligibility Criteria (For Singaporeans & Permanent Residents)
- Must be at least 21 years old.
- Minimum monthly income of SGD 2,000.
- Must have exercised the Option to Purchase (OTP) for the new property.
Required Documents
- NRIC (National Registration Identity Card).
- Proof of residence, such as a recent utility bill, an official letter addressed to you, or a tenancy agreement.
- Certificate of employment or the most recent three months’ payslips.
- SingPass login details for verification via CPF, HDB, or IRAS.
- A copy of the Option to Purchase (OTP) document.
Meeting these requirements will help expedite your loan application, ensuring a faster approval process and timely disbursement of funds.
How to Apply for a Bridging Loan from a Licensed Moneylender
Once you have the requirements ready, the next big step is applying for the loan. Follow these simple steps to secure your loan efficiently:
1. Apply Online or Call Us
Start your application from the comfort of your home by visiting www.rafflescredit.com.sg or calling us at 6235 1788. Our team is ready to assist you with any inquiries and guide you through the process.
2. Visit Our Office for a Consultation
Once your application is reviewed, you will have to be physically present in our office for an in-person consultation. During this session, we will assess your financial needs and customize a loan plan tailored to your situation.
3. Receive Your Funds on the Same Day
After finalizing the loan agreement, your funds will be disbursed immediately. Enjoy fast and seamless access to cash, allowing you to manage your financial needs without delay.
Final Word
A temporary bridging loan is a valuable financing option for businesses in Singapore, offering government-backed support with lower interest rates and higher loan amounts. However, not all businesses qualify due to stringent eligibility criteria. In such cases, exploring alternative funding solutions, such as bridging loans from licensed moneylenders, can provide quick and flexible access to capital.
Key Takeaways:
- Eligibility for TBLs is strict due to potential government risks, requiring businesses to meet criteria such as local ownership and creditworthiness, making it inaccessible to some SMEs.
- Banks also provide bridging loans, but they often come with higher interest rates, extensive documentation requirements, and longer approval times.
- Licensed moneylenders offer a faster and more flexible alternative, with minimal paperwork, approval within the day, and competitive interest rates between 1% and 4% per month.
If you need fast and reliable short-term financing, Raffles Credit provides a quick and hassle-free alternative to temporary bridging loans. With flexible terms, fast approvals, and same-day cash disbursement, we help businesses bridge financial gaps without delays. Apply now for a free quote and get your cash on the same day!
