Loan Insurance Scheme Tranche 3 (LIS T3)

Features
Introducing the Loan Insurance Scheme Tranche 3 (LIS T3):
An alternative access to financing for SMEs and Non-SMEs
LIS T3 offers Singapore-based SMEs an additional source of financing to fuel their entrepreneurial aspirations. LIS T3 provides flexibility to Participating Financial Institutions (we are one of them) to package attractive loan facilities to companies based on their risk profile. It is a variable-cost financing programme that meets the company's working capital needs in Singapore and overseas.
 
A portion of the loans will be insured against default risks. The insurance premiums will be co-shared between the government through the Standards, Productivity and Innovation Board (SPRING Singapore), International Enterprise Singapore (IE Singapore) and the SMEs. SMEs are required to bear an insurance premium of 0.45% of the loan limit if they apply for LIS T3.

With effect from 1 Dec 2008, LIS T3 is extended to Non-SMEs.

 
How to qualify under LIS T3?
Companies seeking domestic facilities will need to fulfill the following criteria:
  		• At least 30% local shareholdings
  		•  No cap on GROUP fixed assets
  		•  No cap on number of employees

    Companies seeking export-oriented facilities will need to fulfill the following criteria:
  		• Singapore-based
  		•  No cap on GROUP turnover
  		•  Presence of at least 3 strategic business functions in Singapore. Strategic business functions refer to activities such as banking & financial; marketing & business planning; procurement/logistics; training & personnel management; investment planning/coordination; R&D; technical support and manufacturing.

    Companies applying for both domestic and export facilities would have to meet both set of criteria as described above.

     
    Use of LIS T3 Loans:
    a) Establish a viable business
    b) Expand its existing businesses
    c) Diversify into other businesses
    d) Expand trade into new markets
    e) Augment working capital needs of Singapore-based enterprises and that of their overseas subsidiaries
     
    Types of Loan Facilities under LIS T3

    For SMEs

  • Inventory / Stock Financing
  • Secured Working Capital
  • Factoring
  • Bill/ Invoice/ Accounts Receivables Discounting
  • Overseas Working Capital via Standby Letter of Credit

    • For Non-SMEs

  • Working Capital Loans secured against Accounts Receivables
    		•
     
    LIS T3 Loan Terms
    Loan Type Maximum Quantum of Financing Maximum Repayment Period Interest Rates
    Inventory / Stock Financing Facility1 Up to 100% of Purchase Price




    1 year4




    Determine by the Participating Financial Institutions (PFIs)
    Structured Pre-delivery Working Capital (includes revolving working capital facility)2
    Up to 100% of Letters of Credit or of Confirmed Sales Order, except for revolving working capital facility, which shall not exceed 20% of the total facilities given under this category.
    Factoring/Bill or Invoice or Accounts Receivable Discounting With Recourse Up to 100% of invoice value.
    Overseas Working Capital Loans Support Facility via Standby Letter of Credit3
    Up to 100% of the aggregate amount of overseas trade related working capital loans facility limit granted by financial institutions outside of Singapore.

    Notes:
    1. Any disbursement under this facility must be made directly by the PFIs to the vendors/suppliers of the Borrowers. The purchase price includes costs of goods, freight charges, insurance and import duties.
    2. The facility must relate to specific sales and/or purchase orders and/or letters of credit from the Borrower's customers. A revolving working capital facility does not need to relate to any specific sales and/or purchase orders and/or letters of credit from the Borrower's customers albeit related to underlying trade transactions.
    3. Type and quantum of financing of trade related working capital loans shall be determined solely at the discretion of the overseas financial institutions as long as the Standby Letter of Credit Facility herein is issued to support granting of trade related working capital loans to overseas majority owned subsidiaries of the Borrower.
    4. 1 year refers to the maximum duration of the facility to be granted to a Borrower commencing from the date of acceptance by the Borrower of the letter of offer or the date on which the liability was incurred. The facility must be disbursed or the liability incurred within 12 months of the date of acceptance of the relevant letter of offer. Within each type of facility granted, the maximum aggregate repayment term with respect to each advance/disbursement and/or liability incurred shall not exceed 12 months from the date of each advance/disbursement and/or liability incurred within the maximum door-to-door period of 18 months except that this requirement would not be applicable with respect to revolving working capital facility granted.

    FAQ
    Read our FAQ on LIS T3.
     
    Enquiry Form
    Fill up our online enquiry form and we will contact you shortly.
     
    Contact Information
    If you require more details, kindly call our SME Specialists at tel: 1800-3388 338 who understand the local market well and are equipped to meet your financing needs.