Singapore is home to more than 218,000 Small-Medium Enterprises (“SMEs”), defined domestically as firms with annual sales of less than S$100 million or less than 200 employees. These firms employ around 65% of the workforce and contribute about half of the country’s gross value added by enterprises. On average, an SME employs around 10 staff and contributes S$900,000 in gross value added to the Singapore economy.

We had the pleasure of speaking to CEO Randy Sim from Singapore’s IFS Capital to get the low down on commercial finance for SMEs in Singapore.

Randy joined IFS Capital Limited in 2016 as the Chief Executive Officer and Country Head for Singapore. He is responsible for the overall management of IFS Capital Limited’s business in Singapore. Randy began his career with the Singapore Economic Development Board and was responsible for promoting investments into Singapore and industry strategy development. Prior to joining IFS Capital Limited, he spent 8 years in Citibank across its consumer and commercial banking businesses.

IFS Capital Limited, operating through offices in Singapore, Malaysia, Indonesia and Thailand, provides commercial finance services such as factoring, hire-purchase, leasing, loans, government-assistance schemes and trade finance, to small-and-medium-sized enterprises within ASEAN. The Group also provides bonds and guarantees, credit insurance and general insurance through its wholly-owned subsidiary, ECICS Limited. IFS Capital Limited was incorporated in Singapore in 1987 and has been listed on the Mainboard of the Singapore Exchange since July 1993.

What’s happening in Singapore, and how are SMEs currently being financed?

In our conversations with SMEs over the years, cash flow management has consistently been ranked as a key concern of SME owners and managers.

Cash flow management is crucial to long term business sustainability and success. This can sometimes be overlooked and mismanaged due to the size of the SME and the promoter’s focus on business development. When compounded by prolonged customer payment delays, poor cash flow management can spell trouble for many SMEs. Prudent cash flow management requires planning in advance with adequate data, and balancing between business growth and internal resources, which can be further supported by appropriate forms of external financing.

Bank loans are the most popular form of external financing for SMEs in Singapore, in part due to strong governmental risk-sharing support programs. However, many SMEs continue to have limited access to bank financing for reasons ranging from insufficient financial documentation, lack of business credit history, weak business performance or cash flow situation to poor personal credit histories.

What are the implications of the resurgence of non-bank factors in Singapore?

The recent resurgence of factoring in Singapore is largely due to its self-liquidating structure that enables financing arrangements which focus largely on the buyer’s creditworthiness.
By relying on the strength of the buyer, and the factor inserting itself into the trade and becoming party to the transaction, the SME can overcome many of the aforementioned financing challenges.  Further, payment delays are generally better understood by a factor in a factoring arrangement than by a bank providing a general bank loan. Being open account-based, factoring is also riding on the decade-long shift away from traditional trade instruments such as letters of credit. Finally, factoring tends to scale better compared to loans especially for SMEs experiencing rapid growth in business volume.

How is regulation shaping non-bank and bank finance in Singapore?

In recent years, supported by an accommodative regulatory regime, a vibrant financing ecosystem for SMEs and start-ups has developed in Singapore. We have seen a growing participation from financiers across the entire risk continuum, from large banks and established non-bank financial institutions such as IFS Capital to private funds and P2P investors.

What are the biggest opportunities at IFS Capital and what are your short to medium term goals?

With Singapore as its headquarters, IFS Capital has focused on meeting the financing needs of SMEs across ASEAN for more than 30 years. We continue to see great opportunities in walking with our SME clients, from financing single invoices as small as S$500 through our digital financing arm MULTIPLY ( to financing multi-million dollar domestic and cross-border trade and projects through our core IFS business ( We have also brought multiple financiers together on a single platform to serve each SME on our LENDINGPOT portal (

For an SME, finding the right financing partner for working capital will help establish the financing discipline and credit groundwork that will open doors to other forms of financing that the SME needs as it develops its capabilities, acquires assets and grows internationally.