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Small businesses are the backbone of Singapore’s economy. SMEs here account for 99% of all enterprises, hire over 70% of all employees, and contribute nearly 50% of our GDP.
Despite shouldering an outsized role, many SMEs often face unique financial obstacles, and require support themselves.
An efficient banking partner, providing everyday SME banking solutions, can empower small businesses to fulfill their growth potential in the region and beyond. The formalisation of the Johor-Singapore Special Economic Zone (JS-SEZ) is another timely reminder that SMEs here must look beyond Singapore’s shores to remain relevant in the interconnected marketplace.
Fortunately, small businesses in Singapore can lean on the expertise and network of local banks, which are some of the largest in Southeast Asia and the safest in the world. For example, OCBC has a regional presence in ASEAN and the Greater China region, as well as several international offices. Small businesses looking to tap on the JS-SEZ for business opportunities can access their OCBC JS-SEZ Advisory Desk to connect to its network of partners to incorporate or grow your business.
Here’s some banking services all small businesses inevitably need when starting and growing, and especially when regional expansion is something you cannot ignore.
#1 Business Bank Account
Sooner or later, all start-ups will have to open a business bank account. The sooner you do it, the less complicated the transition will be.
Apart from separating your personal and business finances, which can complicate your accounting and tax returns, a dedicated business bank account can simplify bookkeeping, help you access business loans, and enable you to accept a range of payment types, including credit cards, debit cards, PayNow Corporate, SGQR and more.
Circling back to the point on regional expansion and the signed JS-SEZ, OCBC also offers free OTT to OCBC Malaysia until the end of 2025. OCBC’s OneCollect solution also supports DuitNow QR collection if your business is looking to expand into Malaysia.
For newer businesses, a dedicated business bank account can also signal professionalism to clients and partners. You can also gear up towards growth from the beginning, while limiting operational risks.
The barrier to opening a business bank account is relatively low. For example, the OCBC Business Growth Account only requires an initial deposit of $1,000 to open, and can be processed entirely online and within a few minutes with your UEN and Singpass or Corppass.
Read Also: Why Open A Business Account With A Bank?
#2 Foreign Currency Business Bank Account
Given Singapore’s small domestic market and population, businesses here need to position themselves to the global, or at least regional, market.
Coupled with remote working trends and Singapore’s costly location, businesses have even more financial incentives to access the regional markets for hiring, manufacturing and sales opportunities.
A foreign currency business bank account allows businesses to improve cost management, minimising risks from currency fluctuations, as well as enhance cost efficiencies, without having to make frequent conversions and incurring bid-ask spreads.
Most banks recognise this, and the OCBC Multi-Currency Business Account enables 13 major currencies, including US Dollar (USD), Euro (EUR), Australian Dollar (AUD), Japanese Yen (JPY), Chinese Yuan (CNH), Hong Kong Dollar (HKD) and more.
For those pairing this account with your OCBC Business Growth Account, you don’t have to pay any extra account fee, as both accounts will incur a single S$10 account fee.
With your OCBC business bank account, you can also book an FX contract for future currency transfers, locking in favourable exchange rates for a future currency transfer. Once you successfully book a contract, you can either transfer the amount to your Multi-Currency Business Account or make payment directly.
Read Also: Tips to Manage Foreign Exchange (FX) effectively for SMEs
#3 Business Debit Card
A business debit card is tailored to the specifics needs of businesses. Your business debit card will also help categorise the spending accurately, also without the need for your finance manager to manually input details.
With business debit cards, you also get real-time updates when transactions are taking place rather than only see them at the end of the month. You can also set limits on transaction amounts.
Some cards also come with business-specific perks. For example, OCBC offers a free Business Debit Card that provides an unlimited 1% cashback on business expenses, such as digital marketing, software services, online retail and travel.
#4 Loans
Unlike larger companies, SMEs may not have a significant cash reserves, and may find themselves requiring financing to better manage cash flow, seize business opportunities, stabilise operations during a downcycle or even fund property or equipment purchases.
That’s why banks like OCBC offer a comprehensive range of business loans to address specific financing needs.
For example, OCBC’s Business First Loan is a collateral-free business loan for young SMEs – even those without a credit history – to borrow up to S$100,000. Businesses retain the flexibility to pre-pay this loan at their own convenience without any penalties.
Alternatively, businesses can use OCBC’s Short-Term Financing to turn your invoices into cash without having to wait out your standard payment terms. From a charge of 0.6% per month, you can get paid faster, and only pay for what you need to use – rather than get locked into a longer-term loan.
Similarly, you can opt for a revolving term loan to pay for only what you use, without even securing your loan against an invoice. These types of loans, such as OCBC’s Revolving Term Loan, can be slightly costlier.
Like individuals, businesses can also tap on Commercial Property Loan or Equipment and Machinery Financing when buying fixed assets for your business.
Read Also: Complete Guide To SME Business Loans In Singapore
#5 Treasury Management
For businesses with excess cash, accessing treasury solutions can be useful as well. Local banks like OCBC will have a comprehensive suite of products and services to meet your needs.
For businesses who want to earn an interest rate that is better than their business bank accounts, but still keep their funds liquid, fixed income instruments like Government Bonds can solve for your needs.
From there, there are investments that offer incremental risks, and expected returns, that businesses can tap on. For some businesses, investing in equities may also be an option worth considering if you have a long time horizon to invest your cash.
Building A Closer Working Relationship With Your Banker
If you have a relationship manager (RM) with your bank, it can significantly improve your company’s financial health and growth trajectory as the relationship grows and understanding of your business’ finances and operations deepens.
You should choose to work with a bank that has experienced RMs who understands your business and the market. For example, businesses looking to tap on the exciting opportunities that the JS-SEZ will potentially bring can consider OCBC. Across both sides of the border, OCBC has dedicated a team of 25 experienced bankers to offer advisory services and financing support to businesses in Singapore, Malaysia, and the region, including Indonesia, China and Hong Kong.
The bank that you work with should also have a strong regional presence that can help you grow your business.
This way, you can access tailored financing advice as your business evolves and expands into overseas markets. You can also rely on your bank’s relationship manager to fast-track your learning curve on the available financing products and facilitate smoother transaction.
