Crowdfunding in Singapore supports the SME industry by providing more forms of financing to address their needs. SeedIn, one of Singapore’s largest debt-based crowdfunding platforms, follows this path by supporting SME growth efforts by provision of crowdfunding loans.
Local homegrown interior design SME, Mezzo Interiors Pte Ltd (Mezzo), is one such beneficiary from debt-based crowdfunding. In June 2015, Mezzo was reported to have obtained a crowdfunding loan from SeedIn in a sum of S$ 660,000 to support their growing efforts. Today, Mezzo has successfully arranged an over S$ 2 million banking facility with a competitive single digit interest rate that allows them to grow the business to greater heights.
SeedIn’s co-founder Mr Eddie Lee said, “SMEs face a myriad of options when it comes to financing and SeedIn understands that younger enterprises usually have more difficulty seeking working capital as they may not have the track record to seek financing from traditional lenders, such as banks. We are pleased that Mezzo has grown to become a bankable SME and glad that we were able to support them during their early growth stage to prove their mettle.”
Crowdfunding loans usually offer interest rates that are at least 10 percent annualised, Mezzo’s effort in obtaining more competitive bank financing signifies the banking and traditional financing industry’s comfort and acceptance of Mezzo as a proven SME who could make good on their loan repayments.
Mezzo was incorporated in early 2013, the company is considered young today at 3 years of age. Without a proven track record, it would be difficult to gain access to bank financing. SeedIn is pleased to be able to assist Mezzo in building up a proven record of capability for further financing opportunities. Today, Mezzo has expanded from local commercial interior design assignment to overseas hospitality and residential main contractor projects.
Mezzo founder Mr Lee Yue Cheng states that: “In today’s business climate, SMEs face multiple challenges such as tight labour issues, limited access to financing, rising costs and increasing competition. SMEs need to be productive and grow quickly in order to remain competitive in their field. These challenges are not easy to overcome when you are a young company. We are lucky to be able to secure crowdfunding to help us grow our business in the early days.”
According to DP Information Group’s SME development Survey 2016, released on 2 Nov 2016, 22% of the 2,513 local SME respondents said they faced financing issues, up from 14 percent last year. They cite higher bank interest rates and tighter access to supplier credit as the main challenges, which will result in a significant impact on the cash flow of SMEs.
Mr Eddie Lee also said that it is imperative for SeedIn to continue to serve SMEs who are building competitiveness in the market. “SeedIn believes that it is important to identify qualified SMEs who need working capital to maximise their capability and groom their profile. Through crowdfunding, we can build a win-win situation for SMEs and our platform investors.”