Enterprise Financing Scheme – Venture Debt

For high-growth startups that do not have significant assets to be used as collateral under traditional bank lending

As announced at Committee of Supply 2023, the EFS-Venture Debt Programme will be enhanced to extend support to venture debt loans backed by Redeemable Convertible Preference Shares (RCPS), to allow more flexible repayment plans for early-stage /deep tech start-ups with irregular cash flow.

About this financing scheme

The Enterprise Financing Scheme – Venture Debt (EFS-VD) aims to finance the growth of innovative enterprises using Venture Debt and Warrants.

This programme supports high growth enterprises that do not have significant assets to be used as collateral under traditional bank lending. Under the enhanced programme, the venture debt facility can be backed by warrants or redeemable convertible preference shares.

Enterprises may use the Loan to:

Grow and expand existing capacity
Diversify into other product lines
Augment working capital needs
Undertake new projects
Undergo mergers and acquisitions

Loan details

Maximum Loan Quantum	S$8 million / borrower Note: Borrowers are subject to an overall borrower group limit of S$20 million for EFS-VD. In addition, there is an overall loan exposure limit of S$50 million per borrower group¹ across all facilities.
Maximum Repayment Period	5 years
EnterpriseSG Risk-share	Risk share is at 50% Young enterprises² may receive a risk share of 70% Borrowers are responsible to repay 100% of the loan amount When defaults occur, the participating Financial Institutions (FIs) are obligated to follow their standard commercial recovery procedure, including the realisation of security, before they can make a claim against Enterprise Singapore for the unrecovered amount in proportion to the risk-share
Interest Rate	Subject to participating FIs’ assessment of risks involved

¹ A Borrower Group consists of the following:

Borrower
Corporate shareholders holding more than 50% at all levels up
Subsidiaries where the Applicant company holds more than 50% shareholdings and subsequent subsidiaries at all levels down
Subsidiaries where the Applicant’s Ultimate Parent Company holds more than 50% shareholdings and their subsidiaries at all levels down

² Young enterprises refer to firms formed within the past 5 years with at least 1 employee and more than 50% equity owned by individuals.

Eligibility

Business entity registered and operating in Singapore
- ACRA-registered Sole Proprietorships, Partnerships, Limited Liability Partnerships and Companies are eligible to apply
- Approvals of loans are subject to the participating Financial Institution's assessment
Company has at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
Company has a Group Annual Sales Turnover not exceeding S$500 million

How to apply

Interested enterprises may approach any of the following participating Financial Institutions to apply for the loan (subject to banks’ credit approval).