Singapore, 30 April 2014 – OCBC Bank continues to build upon its market-leading position in the emerging business segment by introducing the OCBC Business First Loan, providing young businesses with quick access to funding.

Introduced on 25 April, 2014, the OCBC Business First Loan (OCBC First Loan), offered under the Enhanced Micro Loan Programme, is a collateral-free loan that provides companies aged 6 months old to 3 years with up to S$100,000 in funding.

Said OCBC Bank’s Head of Emerging Business, Mr Eric Ong: "On average, more than 50,000 new businesses are set up every year¹, of which only half will survive beyond five years. For the remaining 50 per cent, success often hinges on their ability to rapidly scale up during the initial years.

"This is when funding is most critical as, without the necessary resources, their growth potential could be hampered. Yet many of them find it challenging to obtain funding during their start-up years as their level of operations and business activity may be too low – or they lack the necessary financial records or collaterals to obtain external funding."

In a survey conducted with young businesses, OCBC Bank found that 50 per cent of young businesses in Singapore require funding to kickstart their business growth. More than 80 per cent of these SMEs require a first round of financing within the first two years of commencing business operations. About 41 per cent of these young businesses indicated they required less than S$50,000 for their first loan, while 31 per cent required S$50,000 to S$100,000.

Because they lack the business track record required to get a loan from a financial institution, about 57 per cent of the businesses surveyed fall back on personal savings to fund their businesses.

Today, there are about 170,000 SMEs² in Singapore. They make up about 99 per cent of the total enterprise population in Singapore. Out of the total SME population, about 20 per cent or 39,000 are active startups³.

To ensure a better customer experience, the application process for OCBC First Loan has been made simple. Loan approval takes one day, and business owners only need to complete a simple one-page form, provide their NRIC, latest personal IRAS Notice of Assessment and the company’s latest bank statement. They do not need to provide any audited financial statements.

Typically, for loan applications, business owners have to complete multi-page forms and provide personal and company information such as outstanding credit facilities and sales turnover. Young businesses that do not have any track records will have to provide additional supporting documents such as business plans and contracts they have secured.

Said Mr Ong: "By taking the complexities out of loan application for our customers, we believe this will benefit the time-starved start-ups who can focus on their business operations. We want to ensure a simple, fast and convenient borrowing experience for our customers, with quick access to the much needed funds."

The OCBC First Loan is the latest initiative by OCBC Bank to help young businesses gain access to funding and cope with the complexities of banking. Since focusing on the emerging business segment in 2006, OCBC Bank has differentiated itself by constantly innovating and introducing products that make banking fast, simple and convenient for its customers.

Note: Please refer to the fact sheet for other innovative products that OCBC Bank has introduced for the young business segment.

¹ Based on the Singapore Business Formation Statistics Report, the number of new businesses set up are 60,140 (2013), 56,681 (2012) and 55,699 (2011).

² SMEs, as defined by SPRING, refer to enterprises with annual sales turnover of not more than $100 million or employing no more than 200 staff.

³ Based on the Entrepreneurship Review Committee’s latest study of Singapore’s entrepreneurial landscape. Active start-ups are defined as enterprises less than 5 years old which are employing at least one person.