SME Working Capital Loan
Working Capital Loans or Term Loans are unsecured loans (i.e. not backed by any assets) provided to SMEs in a lump sum, with fixed equal monthly repayment and no usage restriction.
IFS Capital’s Working Capital Loan are structured to complement your business growth plans responsibly.
Explanation
Unsecured Loans (i.e. Term Loans or Working Capital Loans) are basic business loan products. It is not secured by physical collateral, such as property or equipment, but by company directors’ personal guarantees.
Working Capital Loans are popular amongst SMEs due to its flexibility. It can be used to fund their daily operational needs such as inventory purchases and payroll or to finance business expansion plans such as leasing a new retail outlet.
Case Study
Client A requires a S$50,000 business loan to pursue a new business opportunity for his company.
As the company and directors do not possess any collateral that they are able to pledge for the business loan, they are willing to accept a higher interest rate for an unsecured business loan.
Client A approached and accepted IFS Capital’s offer of a S$50,000 unsecured loan* with an effective interest rate of 4.75%* and a tenor of 1 year*.
*the quantum, interest rate and tenor of the unsecured loan is assessed on a case-by-case basis, this example is for illustration purposes only
Loan Terms
Loan Quantum: $50,000
Loan Tenor: 1 year
Interest Rate: 4.75% effective
Loan Repayment Details
Monthly Repayment = $4,274.65
Total Repayment = $51,295.80
Total Interest Paid = $1,295.80
Loan Amortization Schedule (Normal Loan Repayment)
| Month | Monthly Repayment | Interest | Principal | Balance |
|---|---|---|---|---|
| 0 | - | - | - | $50,000.00 |
| 1 | $4,274.65 | $197.92 | $4,076.73 | $45,923.27 |
| 2 | $4,274.65 | $181.78 | $4,092.87 | $41,830.40 |
| 3 | $4,274.65 | $165.58 | $4,109.07 | $37,721.33 |
| 4 | $4,274.65 | $149.31 | $4,125.33 | $33,596.00 |
| 5 | $4,274.65 | $132.98 | $4,141.66 | $29,454.33 |
| 6 | $4,274.65 | $116.59 | $4,158.06 | $25,296.28 |
| 7 | $4,274.65 | $100.13 | $4,174.52 | $21,121.76 |
| 8 | $4,274.65 | $83.61 | $4,191.04 | $16,930.72 |
| 9 | $4,274.65 | $67.02 | $4,207.63 | $12,723.09 |
| 10 | $4,274.65 | $50.36 | $4,224.29 | $8,498.80 |
| 11 | $4,274.65 | $33.64 | $4,241.01 | $4,257.79 |
| 12 | $4,274.65 | $16.85 | $4,257.79 | $0.00 |
| Total | $51,295.80 | $1,295.80 | $50,000.00 | - |
Disclaimer: Data presented in this table are estimates and meant solely for general information purposes.