OCBC Bank launches new business to give a boost to serial entrepreneurs
OCBC Bank has officially launched a new business dedicated to supporting serial entrepreneurs as they establish and grow new businesses. This is the first offering of its kind for small businesses in Singapore.
According to the Bank, the potential base of the serial entrepreneur segment is sizeable, with 1 in 3 new businesses incorporated in Singapore from 2015 to 2017 belonging to an entrepreneur running at least one business.
The official launch of the Serial Entrepreneur business follows the bank’s 12-month pilot programme which started in October 2017. During the pilot, over S$100 million in business loans had been approved.
The inception of the Serial Entrepreneur business came after an extensive mapping exercise of customer journeys comprising more than 500 conversations, where the team listened to and understood the motivations and challenges of serial entrepreneurs. These insights were then used to curate solutions that better support serial entrepreneurs, especially with their new start-ups.
Obtaining a loan even before their new start-up has been incorporated is now possible for serial entrepreneurs. This is a result of the bank’s new credit approach that takes a comprehensive view of the entrepreneur’s experience, business track record and overall business strategy across his or her group of companies. This focus on the serial entrepreneur greatly improves upon the prevailing industry model which evaluates each business on a standalone basis based on their track record and financial credibility which makes it difficult for start-ups less than two years old to obtain financing – even if the founder has operating businesses and a proven track record.
Lena Lim and Wendy Tan, co-founders of childhood education brands Josiah Montessori and My Learning Haven, are serial entrepreneurs who have benefited from this new credit approach.
“We had been running Josiah Montessori since 1996 and expanded to 5 centres during this time. Last year, we felt that there was an opportunity to use our expertise to open My Learning Haven – a sub-brand of Josiah Montessori. Despite My Learning Haven being a new company, we were able to get a loan even before incorporation on the strength of our past success with Josiah Montessori and records with OCBC. This kind of support from a bank is invaluable. We were able to use the loan to kick-start our new company, including payment for renovation expenses, and launched our sub-brand faster than we thought possible.”
The serial entrepreneur business brings together specialists in cash management, mezzanine capital and wealth management, with a relationship manager to form an integrated support network for serial entrepreneurs. Cash management specialists were integral in guiding a select group of serial entrepreneurs to become one of the first in Singapore to start using the funds transfer service, PayNow, for their businesses. Exclusive economic and equity outlook events with the bank’s wealth management specialists were also organised for the serial entrepreneurs.
Said Ms. Christie Chu, Head of Emerging Business, Global Commercial Banking, OCBC Bank, “We have supported entrepreneurs for more than 80 years, and know the importance of constantly listening to our customers to understand their ambitions, along with their needs and challenges. As a result, we realised that we should focus on the serial entrepreneur and recognise his or her journey of successes and failures, rather than assessing a business solely on its financial track record.
“Having this holistic view has enabled us to provide serial entrepreneurs with enhanced credit support and curated solutions for their new ventures, to help them supercharge their growth. From taking a serial entrepreneur’s track record in Singapore into account for a loan for his first overseas business, to facilitating takeovers of other companies and otherwise providing assistance toward their goal of becoming a listed company – the pilot has been very meaningful and yielded many successes so far. And this is just the first step. Moving forward, we will continue to enhance our solutions so that we can be even more effective co-creators of their business models with them to sustain growth.”