SME Banking in Singapore [Business Banking in Asia]

SME banking in Singapore unlocks access to one of the most advanced and stable banking systems in the world.

But, it’s also one of the most difficult places to open accounts for foreign non-resident business owners.

Fortunately, opening a corporate or SME bank account in Singapore is 100% possible. And, in certain instances, it can even be done 100% remotely.

In this article, we’re going to breakdown SME banking and discuss who should (and shouldn’t) consider banking in Singapore.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. What is SME Banking?
  2. Why Open a Business Bank Account in Singapore?
  3. What Type of Services Come With SME Banking?
  4. Ready to Explore Your Options?

What is SME Banking?

SME Banking includes banking and financial services that cater to Small and Medium Enterprises (SMEs). In general, SMEs have annual revenue between USD 10mm and 100mm. However, different countries (and banks) may classify SMEs differently.

SME banking typically includes the following products and services:

  1. Current accounts for day-to-day activities
  2. Corporate credit card programs
  3. Cash management services
  4. Foreign exchange services
  5. Treasury management services
  6. Merchant services and payment processing
  7. Trade financing facilities (e.g. letters of credit and guarantees)
  8. Short term overdraft facilities
  9. Medium term working capital loans
  10. Long term project financing

We’ll take a closer look at these services and how they differ below.

Of course, if your business has specific requirements that are not on this list, most banks will aim to accommodate your requirements.

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Why Open a Business Bank Account in Singapore?

As mentioned, Singapore is home to one of the most stable banking systems in the world. In fact, Singapore has never had a bank failure and banks here are frequently referenced as among the best available anywhere.

But, is Singapore suitable for business banking?

Well, that depends on your business, your ties to the region, how much you can deposit when opening accounts, and the specific services you’re looking to access.

For example, if you have a US company with no ties to Asia and can only afford to deposit USD 1,000, Singapore won’t be available to you.

But, if you have a Singapore, Malaysia, or Hong Kong company with clients in Singapore, and you can deposit between USD 25,000 to 100,000, there’s a good chance you can open accounts. In fact, you may even be able to open accounts remotely.

What Type of Services Come With SME Banking?

As promised, we’re going to take a closer look at the services available through SME banking.

Current Accounts for Day-to-Day Activities

Current accounts refer to standard checking accounts that can be used for day-to-day banking activities. In most cases, banks are able to offer sub accounts for specific divisions within the business to allow for more streamlined accounting.

Corporate Credit Card Programs

Corporate credit cards are often a requirement for businesses with multiple branches and department heads that manage their own expense lines. Having corporate credit cards centralized under one bank ensures that accounting and expense management are more streamlined.

Cash Management Services

Cash management refers to the processing of incoming and outgoing transactions and reporting of cash flow. Depending on the bank, it can also include customer receivables and payment processing solutions such as point-of-sale for brick-and-mortar operations.

Foreign Exchange Services

Foreign exchange services or Forex services refer to the management of relevant foreign currencies on behalf of the business. This typically involves balancing forex volatility against future commitments either through the buying and selling of currencies or more complex hedging mechanisms depending on the requirements of the business.

Treasury Management Services

Treasury management refers to the management of a business’ finances with the goal of maintaining required liquidity levels and mitigating financial risks. This can include managing cash on hand, liquid investments, and other financial assets.

Merchant Services and Payment Processing

Merchant services and payment processing refer to accepting and processing payments from credit cards. While there are many payment gateways available, many SMEs will outgrow the capacity of entry level payment processors and require dedicated merchant services in order to manage volume and disputes.

Trade Financing Facilities

Trade financing facilities refer to bank issued documents that allow businesses to receive products and services upfront and pay for them at a later date. These facilities are common in import and export businesses, infrastructure and construction projects, and other capital intensive businesses. Common examples of trade financing facilities include bank guarantees and letters of credit.

Short Term Overdraft Facilities

Overdraft facilities refer to a credit facility that allows a business to withdraw more than their available balance in a current account.

Medium Term Working Capital Loans

Working capital loans are typically used by SMEs to manage short term commitments like payroll, operating expenses, office and administrative expenses, and other non-capital projects or investments.

Long Term Project Financing

Project financing typically refers to debt financing for capital intensive projects and can include facilities for expanding the business through acquisitions.

Ready to Explore Your Options?

If you would like assistance navigating your banking options at home or abroad, we can help.

You can access GlobalBanks IQ, our international banking intelligence platform, in just a few clicks. Unlock our bank database, individual bank profiles, account opening strategies and reports, banker scripts, and more.

But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.

Of course, if you have any questions, please contact us directly.

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