One of the key barriers of growth of entrepreneurs and business owners is that of raising funds.

Bank loans are difficult to get as banks usually lend to businesses with strong cashflow history.

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On the flip side, risk capital investors (angels and venture capital funds) expect high growth and rapid exit, which are not options for majority of businesses.

But cash is the blood of every business, and with some resourcefulness and techniques of choosing the right funding, businesses can still acquire huge success.

5 Ways To Raise Funding in Singapore

Grants & Financing Schemes By Government - Singapore counts as one of the world’s best places to run a business, and this is due partly to its business-friendly environment, infrastructure, and not to mention, generous funding and grants rendered to new businesses.

From cheaper loans to matching grants to equity, choose from an array of government aid to give you a headstart!

There is also a new Micro-Loan Programme(MLP), specially catered to help start-ups that often struggle to get bank loans. The MLP is an initiative by Spring Singapore, an agency that is tasked to help Singapore enterprises grow.

Companies that are less than three years old can borrow up to $100,000 from 10 participating financial institutions, including OCBC, DBS and UOB. Interests are at a minimum of 5.5% for loan tenure of 4 years and below.

Angel Funds and Venture Capital – Angel funds are financing provided by an affluent individual(angel investor) that provides capital for a business start-up in exchange for ownership equity.

Angels typically provide capital funding with their own funds. The difference with venture capital is that they are firms that raise money by offering investors a chance to take part in their fund that is then used to buy shares in a private enterprise.

Equity financing - Equity financing is the process of rasing capital through the sale of shares of the company. Initial Public Offerings (IPO), shares that you can buy on listed companies on the Singapore Exchange (SGX) are some examples of equity financing.

Debt financing – When a company raises money by selling bonds or notes to individual and insitutions in return for lending the money. The investors become creditors and is promised the return of their principal and interest on the debt.

An example of this is selling a 5-year corporate bond with a 3% interest.

Crowdfunding – One of the latest techniques of raising fund utilises technology to pull together funds by individual investors. By pooling together small sums of money from a lot of people, businesses or entrepreneurs hope to use this alternative form of financing to bring their business idea to fruition.

There are many different types of returns, depending on the type of crowdfunding but investors can expect returns in terms of equity, interest payments or even donate to a social cause with no expectations of returns.

Case Study of How Singapore Entrepreneurs use Financing to grow their business

1) Neo Group Limited

Financing Source: Initial Public Offering

Image credits: Channel News Asia

About the company: Neo Group Limited started as a food catering group in Singapore. The company was established since 1992 and has since expanded to include other related businesses, such as food Retail, food and catering supplies businesses and a flowers and gifts business.

The company went on to apply for listing on the Singapore Exchange and was successfully listed in July 2012 with the IPO price of $0.30.

They also went regional with their retail business, Umisushi with the ir first overseas venture in Jakarta. Latest news from May 2015 saw Neo Group acquire a 55%-stake in parent company of “DODO” fishballs, Thong Siek Group, for S$7.35 million. Last share trading price in Sept 2015 is at $0.73 cents, a 143% gain since IPO.

All time high for Neo Group's share price was on 6 June 2014 where shares reached $0.99.

2) Aspial Group Limited

Financing Source - Corporate bonds

About the company: Aspial Corporation Limited started out as a traditional jeweller, Lee Hwa Goldsmiths & Jewellers Pte Ltd, in 1970 with its first shop at Circuit Road. The company has since grown to manage a wide spectrum of businesses, including jewellery retail, property development and financial services. Under its jewellery retail business, familar brandnames include Aspial, Lee Hwa Jewellery, CITIGEMS and Goldheart Jewelry.

Just in August 2015, the group launched a S$75 million 5-year retail bond offering fixed interest of 5.25% per annum.

3) Redmart

Financing Source: Venture Capital

About the company: Redmart is one of the first start-ups that revolutionalised grocery shopping online.

Started by former investment bankers - Roger Egan III, CEO; Vikram Rupani, President; Rajesh Lingappa, CTO in August 2011, the company has amassed close to S$55.1 million across six rounds and 16 investors, according to Crunchbase, and that's within just four years. Its investors are well-knowned in the start-up space, including Singapore-based Garena, Facebook Co-founder Eduardo Saverin and SoftBank Ventures.

The system increased fulfillment capacity by over 50% without any significant increase in manpower resources.

In July this year, Redmart launched an E-Commerce Marketplace concept in collaboration with Spring Singapore to allow independent sellers and SMEs to list and sell their products on Redmart Marketplace.

The project with SPRING Singapore will last for a year till August 2016 and through the process, RedMart will mentor around 400 local businesses.

The company also said it will seek to raise a larger Series C funding later in 2015 to fund international expansion, launch a On-Demand Marketplace and invest in its dry and fresh food offerings.

4) Acepro Security Consultancy Pte Ltd

Financing Source: Invoice Financing

About the company: Acepro was established in December 2010, providing a range of security services such as guarding services, security consulting, security technology and equipment.

Business grew fast with several renowned malls and private properties in Singapore as their clientele base but the company faced cashflow issues and remained in deficit for its first three years.

Read the full case study here​

This has helped them greatly to improve cashflow, stabilise the operations of their business and brought them profitability after its third year of operations. Revenue doubled year-on-year to an annual revenue of S$12 million per year.