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Business Term Loan could help cash-strapped business owners

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Author: Ravi Philemon

A business term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.

By: Hitesh Khan/

For example, if you’re looking to borrow a large sum of money and have a property on hand, you may be able to “cash out” the property’s value by taking a term loan or an home equity loan.

Many banks have business term loan programs that can offer small businesses the cash they need to operate from month to month.

Business term loans are very useful for small businesses to purchase fixed assets such as equipment for its production process. Business term Loan is not the most accessible option for everyone in the market, and approval is highly conditional upon the bank, but it is possible.

Whether you call it a business term loan, a home equity loan or an equity term loan, they all mean the same thing. A term loan lets you borrow money, while using your house as collateral. Business term loan is another option available to homeowners who may have a tight cash situation but have have a valuable house at their disposal, which they may sell and downgrade. But a home equity loan lets you get money out of your house, without having to lose it.

If your property has increased in value over time, you may take a term loan by using the equity of your property as collateral  and at a relatively low interest rate.

The businbusiness term loaness term loan extended against your property means that its equity becomes collateral.

There are plenty of advantages of taking a term loan by using your house is the collateral. For example, the bank feels a lot more secure knowing you can’t exactly pack up your house and run away with it. Because there’s something they can foreclose on, banks consider term loans to be low-risk, secured loans.

SME loans – with low success rate, it is important to work with trusted hands

That means banks charge a super-low interest rate, seldom above 1.3 per cent per annum. For reference, that’s less than a third of your CPF Ordinary Account rate (up to 3.5 per cent per annum), and about 1/6th of a personal loan rate (about six per cent per annum). That super-low interest rate means home equity loans are quite cheap, and can provide a much bigger loan than you’d get through, say, a personal installment loan. Most other, unsecured loans can only lend you up to four times your monthly salary.

On top of this, the government in 2017, made regulatory changes to term loan restrictions. If your house is already paid up, you can borrow up to half its value, without having to meet Total Debt Servicing Ratio (TDSR) restrictions.

This is how a term loan works:

Suppose you have purchased a property in 2010 for $650,000.
Loan was 80% = $520,000 amortized over 30 years.
In 2018, a new valuation was done and the property is worth $1 million.
The current loan amount is $440,000.
If this property loan is the only one you have in Singapore, then you may qualify for 80% lending on valuation, which is $800,000.
Equity home loan amount = (80% * valuation) less current loan amount less CPF usage including accrued interest.
Assuming you have used $160,000 CPF with accrued interest, this is the home equity loan amount you would get:
$800,000 – $440,000 – $150,000 = $200,000
Together with the outstanding loan, the total debt on the property now would be $640,000.

As a high number of applications for SME loans are unsuccessful, it is important for passionate business-owners to consider term loans to grow and sustain their business operations. It is also important for them to work with trusted hands, and with people who know the industry.

Mortgage Broker Singapore – Should I use one?

One recent research report said that up to 81 per cent of SMEs in Singapore do not qualify for business financing. Many applications for bank loans are delayed or rejected because business owners are not familiar with the qualifications for the loans or of how to apply for such loans.

Access to crucial credit facility is often hindered by the lack the relevant financial knowledge and / or the resources to engage professional business consultancy services to manage and address their obligations and financial liabilities as business owners. The terrain to apply and qualify for loans is also uneven because creditors are not just banks but finance companies and other licensed lending entities whose security arrangements may be different or more complicated.

Mr Paul Ho, chief mortgage consultant at iCompareLoan said, “before you try to negotiate commercial loans, know one cardinal rule, ‘businesses need to borrow when they do not need money’.”

He added: “When your business is struggling and you need additional funding to tide over a tough patch, then you will find that your access to funding is completely cut off and end up with very expensive funding.”

To negotiate commercial loans be wise to plan 6 to 12 months ahead for any potential funding needs. Even if you do not need funding now, you may want to quickly refinance your home loans for any potential equity and stand-by cash even if you do not need it now.

Remember, banks assess your credit and affordability at the point of application, so you should apply when your status is good, not when you have further deteriorated. At that time, no banks will lend you.

You should also read more about the different types of funding. If your business is profitable and you only need short term funding, but your access to bank’s working capital is temporarily cut off, then you should consider personal loans as a source.

There are many factors to consider when you try to secure local business loans, and good negotiators can always tweak terms to have an advantage.

If you have to bargain business loans be mindful that loan specialists can be your best ally. They can set you up on a path that can get you the best personal loans in a quick and seamless manner. They can also arrange for the Best Home Equity Loans in Singapore as they have close links with the best lenders in town and can help you compare Singapore loans and settle for a package that best suits your needs.

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New SERS projects, don’t expect many more sites to be eligible

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Author: Ravi Philemon

New SERS projects will be very rare going forward says Minister for National Development

In responding to a parliamentary question on new SERS projects, the Minister for National Development, Mr Lawrence Wong, said that he does not expect many more sites to be eligible for HDB‘s Selective En-bloc Redevelopment Scheme (SERS).

Challenges involving the new SERS projects

The Minister was asked, “in the past 10 years, what is the number of HDB’s Selective En-bloc Redevelopment Scheme (SERS) projects and the number of dwelling units affected, broken down on an annual basis; and what are the challenges involving SERS projects.”

In responding to the parliamentary question on new SERS projects, the Minister said:

“Since 2010, 8 public housing sites involving about 6,900 sold flats (or an average of 690 sold flats per year) have been announced for the SERS. SERS involves compulsory acquisition and is done only on a limited basis, after taking into consideration various factors such as the redevelopment potential of the site, and the availability of suitable replacement sites nearby to rehouse the home-owners involved. Given these restrictions, we do not expect many more sites to be eligible for SERS. This is why the Government has announced a new Voluntary Early Redevelopment Scheme (VERS) to more systematically redevelop and renew our older HDB towns.”

The Minister announced in March 2017 that HDB flat owners should not assume that all old HDB flats will become eligible for SERS. Wong said that “only 4% of HDB flats have been identified for SERS since it was launched in 1995”, and that “it is only offered to HDB blocks located in sites with high redevelopment potential”.

Wong’s comments on SERS spooked a considerable segment of the HDB flat owners as about 70,000 flats (of the 1-million HDB flats) are more than 40 years old, and almost 10 percent of flats will face lease expiry in 50 years. The Minister’s announcement essentially means that such flats will have zero value once it reaches 99 years and owners will have to vacate their homes. Most owners will see the land their flat was on being returned to the State at the end of the 99-year-leasehold.

The public’s alarm caused the Minister to clarify that HDB flats are still a “good store of asset value”, so long as one plans ahead and makes prudent housing decisions. The assurance by the Minister however, failed to ease the concerns of some who asked ‘how in one fell sweep, HDB flats had gone from being “asset enhancement” to “good store of asset value”’.

Limited number of new SERS projects since 2011

In June 2018, three blocks of flats in Macpherson were identified for SERS. The set of blocks identified for SERS in Macpherson are only the second set of blocks identified for SERS since the last General Election.

Before the Macpherson, 8 blocks of flats in West Coast Road were identified for SERS in August 2016. It is unclear how many more flats will be identified for SERS before the next General Election is called, but the set of flats identified for SERS has been declining between each election cycle.

After the May 2006 General Election and before the May 2011 General Election, 9 set off blocks were identified for SERS:

S/N Date Town Completed SERS Site* Designated Replacement Site
Street Name Block No. Street Name Block No.
1 22 Jun 2006 Ang Mo Kio Ang Mo Kio Avenue 2/3/4 246 to 252 Ang Mo Kio Avenue 1 307A, 307B, 307C, 308A, 308B, 310A, 310B and 310C
2 8 Dec 2006 Queenstown
(Buona Vista)
Ghim Moh Road 9 to 12, 9A and 12A Ghim Moh Link 22, 23 and 26 to 28
3 23 Feb 2007 Bukit Merah Henderson Road 94 and 96 Kim Tian Road 126A, 126C, 127A, 127C and 127D
4 Bukit Merah
(Silat)
Silat Walk / Kampong
Bahru Hill / Silat Road
17 to 19 and 22 to 31
5 28 Jun 2007 Clementi Clementi Avenue 1 401 to 404, 407 to 409 Clementi Avenue 1 416 to 418, 420, 421, 423 to 425
6 12 Jul 2007 Jurong East
(Teban Gardens)
Teban Gardens Road 2 to 11 Teban Gardens Road 20 to 23
7 8 Aug 2008 Queenstown Commonwealth Drive 74, 75, 76, 77, 78, 79, 80 Commonwealth Drive Blocks 50 to 54
(Commonwealth 10)
8 8 Nov 2009 Bukit Merah Bukit Merah View 110, 111, 113, 114 Boon Tiong Road Blocks 9A, 9B, 10A and 10B
(Tiong Bahru View)
9 13 Feb 2011 Clementi Clementi Avenue 5 321 to 323 Clementi Avenue 3 Blocks 440A to 440C
(Clementi Cascadia)

After the May 2011 General Election and before the September 2015 General Election, 6 set off blocks were identified for SERS:

S/N Date Town Completed SERS Site* Designated Replacement Site
Street Name Block No. Street Name Block No.
1 9 Nov 2011 Bedok
(East Coast)
East Coast Road 1 to 3 Chai Chee Road Blocks 807B and 807C
(Ping Yi Greens)
2 15 Nov 2011 Central Rochor Road 1, 2, 3, 4 Upper Boon Keng Rd 8A, 8B, 8C
(Kallang Trivista)
3 3 Dec 2011 Bukit Merah Redhill Close 1 to 3, 5 to 22 Henderson Road Blocks 95A to 95C, 96A and 96B
(City Vue @Henderson)
4 29 Dec 2011 Jurong West
(Boon Lay Gardens)
Boon Lay Drive 167 to 172 Jurong West Central 697A to 6097C, 698A to 698C
(Jurong West Blossom)
5 25 Jun 2012 Woodlands Woodlands Centre Road 1A and 2A Woodlands Drive 70 Blocks 717A and 717B
(Admiralty Vista)
6 27 Jun 2014 Queenstown Tanglin Halt Road / Commonwealth Drive 24 to 32, 33 to 38,
40 to 45, 55, 56,
58 to 60 and 62 to 66
Margaret Drive (Site A)
Margaret Drive (Site B)
Dawson Road (Ste C)
Dawson Road (Site D)
Strathmore Avenue (Site E)

new sers projectsIn August 2018, the Government said that it will transition to VERS once the SERS limit is reached. SERS is an urban redevelopment strategy employed by the Housing and Development Board (HDB) in maintaining and upgrading public housing flats in older estates.

Launched in August 1995, SERS involves a small selection of specific precincts in older estates which undergo demolition and redevelopment to optimise land use, as opposed to upgrading of existing flats via the Main Upgrading and Interim Upgrading Programmes. Mr Wong, the Minister for National Development said that according to HDB’s estimates, only about 5 per cent of flats are suitable for SERS.

He said new SERS projects will be limited and will run until all remaining sites with high development potential have been cleared.

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Smarten Spaces secures $12M Series A Funding from leading investor

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Author: Ravi Philemon

Smarten Spaces, a Singapore Headquartered company, in November last year, announced the close of a $12M Series A investment round. The new investment was made by leading Asia investor Symphony International Holdings Limited (Symphony).

smarten spacesThe Smarten Spaces platform is quite unique in the industry as it looks to fill the gap with a one-stop solution for space owners and managers to digitize and manage their space.

The company believes that the goal of smart building technology is not necessarily to add sophistication but to identify and systematically eliminate the inefficiencies within the experience and workflows currently in place.

Since its launch back in 2017, Smarten Spaces has developed one of the world’s first end-to-end AI platform to disrupt a $19.9 billion smart space industry with current focus on enterprise offices, real estate developers, coworking, co-living and other spaces of work and leisure. The platform enables space owners to offer next-generation spaces that will improve productivity, reduce operational costs and offer conveniences to the end-users.

Anil Thadani, Chairman, Symphony International Holdings Limited said “This is our first investment in a SaaS company and we are looking forward to working with Dinesh and his team to grow the business, especially in the Real Estate and Hospitality industries where we have deep connections and significant investment experience.”

Dinesh Malkani, Founder & CEO, commenting on this important milestone in Smarten Spaces journey said, “We are delighted to have Symphony for our Series A investment. Their long-term view and portfolio of investments in real estate and consumer brands provide many synergistic opportunities as we expand Smarten Spaces across the Asia Pacific and North America within the rapidly growing Proptech industry.” Malkani added, “Our platform today provides the capability to provide intuitive user experience and optimize spaces. This lets us build the improved value of built spaces and long-term business relationships.”

About Smarten Spaces Pte Ltd.
Smarten Spaces was founded in 2017 by Dinesh Malkani and his Co-Founders Anushka Verghese and Prithvi Shergill and has since rapidly acquired customers in Singapore and India. Currently, the company is focussed on digitizing spaces for Enterprises, Commercial real estate, Coworking, Coliving and Warehousing. With a projected market value of 19.9 Bn for smart spaces and businesses globally implementing ‘smart’ solutions across their value chain, Smarten Spaces will enable the transformation of spaces by digitizing services and bridging the last mile between real estate providers, consumers and space. This results in intuitive user experience and secures optimized spaces in environments used by communities of people.

“The whole of transaction process provided by Smarten Spaces property tech platform, points to the signs of the times where property agents must upgrade to keep up or die”, said Mr Paul Ho, chief mortgage officer of iCompareLoan.

He noted that many property agencies struggle to keep up with all the regulatory changes in the industry, as well as the changing financial calculations for acquiring a property. He urged property agents to master the basics in property financing, refinancing, taxation and CPF.

Mr Ho said that iCompareLoan.com runs a full 2 – 3 days course on how property agents can produce such reports for their customers. He added that the trademarked course teaches Property Agents how to generate complicated Financial calculations using –  Home Loan Report (TM) – in 3 mins flat. This helps Property agents to close deals faster and serve customers more professionally.

The Home Loan Report tool is a Singapore’s first one-of-a-kind analysis platform that provides latest updates of detailed loan packages and helps property agents, financial advisors and mortgage brokers to analyse home loan packages for their clients and give unbiased home loan / commercial loan analysis for their property buyers and home owners.

As buyers of the future grow more discerning, agents cannot afford to just rely on their personality or their experience to attract clients. Buyers and sellers of the future will increasingly rely on agents to have knowledge on property finance calculations and this is where the Home Loan report comes in.

This trademarked tool is a one-stop solution that can help deliver a detailed home loan report to property agents in 3 minutes flat. This is especially helpful when agents who do not have knowledge on property finance calculations make cold calls to potential clients and need to have a thorough analysis at hand in order to best direct each client on what their property buying and selling options are.

Such a report will not only help agents deliver the best possible property options to their clients, it will also help prevent the agent or potential buyers or sellers from wasting each other’s time since they already have all the information they need on the potential client’s buying or selling prospects at hand.

Property agents who want to continue working in the industry must set themselves apart and position themselves as thought leaders, especially in this day and age where digital marketing largely drives the economy.

Businesses should always looking at ways to improve customer experience, and enable a growing need for customers to have easy access to services. At the same time, it was also essential that businesses only worked with partners that shared the same vision of providing good quality services to our customers. This is one big reason why property agents should work with trusted partners like iCompareLoan.

Besides providing trademarked training for property agents and real estate services company, iCompareLoan also provides a one-stop-service for the procurement of the best home loans or refinancing. The services of mortgage consultants are absolutely free.

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Interior maintenance of flats is responsibility of HDB owners

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for the source.
Author: Ravi Philemon

The Minister for National Development reiterated that HDB owners are responsible for the interior maintenance of their flats

In responding to a parliamentary question on moulding on ceilings or walls of HDB flats, the Minister for National Development Lawrence Wong, emphasised that the responsibility of interior maintenance is that of owners.

The Minister was asked, “for the past three years, how many cases of moulding on ceilings or walls of HDB flats have been reported; and what action does HDB take to address these complaints.” And he responded:

“Mould formation is usually caused by insufficient ventilation, as high humidity encourages mould growth. Over the past 3 years, HDB has received an annual average of about 1.4 reported cases of mould per 1,000 dwelling units.

Flat owners are responsible for the maintenance of the interior of their flats, including the ceilings and walls within their flats. Nevertheless, should HDB receive complaints about mould on the ceilings or walls of HDB flats, HDB will assist flat owners by providing advice on remedial repairs, and refer them to suitable repair contractors. If flat owners require financial assistance to pay for repair works, HDB will also refer them to the relevant community or grassroots organisations.”

New flat buyers can save some money in interior maintenance if they do HDB home defect inspections right before renovating their flats. That said, some defects are more visible to the naked eyes than others. Even experts may not be able to detect some defects.

 

Case study on importance of HDB home defect inspections and interior maintenance

interior maintenance

Minister for National Development reiterated that HDB owners are responsible for the interior maintenance of their flats

A case in point for new HDB flat buyers,  is that of a unit at the 10th floor of Block 678C Punggol Drive. The homeowners of a relatively new Built-to-Order (BTO) flat unit were only able to enjoy their unit for about 7 months in peace, before a termite infestation turned their dream home into a nightmare. The owner, 33-year-old insurance agent Mr Wong, shared with the Chinese daily that he and his wife moved into the unit in December 2016. In July 2017, the couple discovered a termite infestation in their home.

Just one month later, the couple found that the matter was more serious than they initially thought when Mr Wong discovered several nests in the wooden skirting of his home when his wife was abroad in August 2017.

Afraid, Mr Wong paid $300 to a pest exterminator to get rid of the termites. Unfortunately, the termites returned over the next few weeks, rebuilding their nests at the wooden skirting of the flat.

Mr Wong contacted Housing Development Board (HDB) about the matter. HDB revealed that they visited the flat in September 2017 but could not locate the termite nests. Mr Wong told reporters that after a subsequent house visit and investigation at the end of November 2017, HDB officials shared with him that they suspect the termites might have come from the roof garden above the unit.

Mr Wong revealed that HDB sent officers to remove the wooden skirting as a temporary solution last week, as the situation continues to be closely monitored by officials. A HDB spokesman added that while it is the responsibility of the flat owner to maintain their home, the Board is helping to exterminate the termites out of “goodwill”.

Unfortunately, the termite issue is not the only problem Mr Wong and his wife are facing. The insurance agent revealed to reporters that they also have to deal with water leaks on rainy days, as rainwater slides down the outer walls of his flat and leaks into his flat.

He lamented to the daily: “When it’s raining, there’s water leak. When it’s not raining, there’s termites, we don’t know what to do.”

It is now clearer that HDB home defect inspections such as this will have to be undertaken by the homeowners engaging private contractors.

Defects in newly completed private non-landed property and HDB flats are not uncommon. Some years ago, residents of the Seaview Condo sued the developer, the main contractor, the architect and the electrical engineers for $32 million for all the defects in their project.

Developers of public housing projects are not without faults either. New HDB flat buyers should note that some reports say that there are 400 to 600 defects on average, in any newly TOP BTO unit.

The Minister for National Development clarified in August last year that HDB home defect inspections are the responsibility of flat owners. The Minister was responding to a parliamentary question by an MP who asked, “what are the measures to ensure that home defect inspectors are adequately trained and accredited; and whether BCA will introduce a licensing framework for this profession.”

In responding to the question the Minister said:

“BCA encourages the construction industry to improve on workmanship quality through the Construction Quality Assessment System (CONQUAS) and Quality Mark (QM) schemes. CONQUAS assesses the structural works, architectural works, and mechanical and electrical works of a new building project. QM assesses the workmanship quality of the internal architectural finishes of every dwelling unit to ensure consistent workmanship quality.

Home buyers can use the CONQUAS and QM scores as a guide and benchmark for quality when they purchase a home. Beyond that, some home buyers also engage private sector firms to undertake home defect inspections. These home defect inspectors are not regulated or licensed by BCA. Our focus is to put in place tighter quality controls at the start of the building process. That is what the CONQUAS and QM schemes aim to achieve.”

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Negotiate commercial loans to make sure that you are getting the best deal

Click on Negotiate commercial loans to make sure that you are getting the best deal
for the source.
Author: Ravi Philemon

Not everyone knows the art to negotiate commercial loans

By: Hitesh Khan/

When searching for good commercial loan financing, there are a number of different options that you could take. When you are dealing with a commercial lender, you want to make sure that you are getting the best deal.

If you do not negotiate commercial loans and if you agree to something prematurely, you could end up regretting it later.

Many of the terms of a commercial loan are negotiable so you will want to do your best when negotiation during the loan process. This can save you some substantial amounts of money and give you terms that you feel comfortable working with.

negotiate commercial loans

Image credit: YouTube

Here are a five handy tips which will be helpful to negotiate commercial loans to help you expand your business.

1. Do your homework and go to the right lender

You should research the background of your lender and different products that they have on offer before applying for good commercial loan financing. You should find lenders that are able to help you and not waste time at banks that cannot. Although there may be several similar products on offer at the different lenders, the fine print may make a lot of difference from one commercial loan to another.

Business expansion loans could be the lifeline to increase revenues

2. Be Persistent

When you are negotiating for good commercial loan financing, you need to stick to your guns.

Do not waver from what you want. The lender needs your business a lot more than you need them. There are many lenders that you could potentially go with, so do not hesitate to threaten to leave if you do not get what you want. You may have to concede a few things here and there, but overall, you should be able to get what you want. The trick is to not waver on your requests and just keep asking until you get them.

3. Be prepared

Preparing for a business loan is like dressing for your wedding, so you want to look as attractive as possible and present yourself like a good risk.  While you need to speak the part, so does your paperwork. You should get copies of your credit report to identify any negative items and try to repair or remove them.  You should also have a letter of explanation prepared for any negative items that remain.

You should also have your tax returns for the past three years, three years of fiscal year-end financial statements, and year-to-date financial statements. You should prepare a personal financial statement listing your income, assets and liabilities. Also, have copies of up to six months of bank statements, and any recent appraisals you have had done.

Before you arrive at the bank, make sure you and your paperwork are organized and neat. Neatness, grammar, spelling and organization count. Sloppy requests don’t even get read and are often rejected immediately.

4. Be Silent

One of the oldest negotiating tactics in the book is being silent after an offer and it still works today. When you make a counteroffer on a particular term in the loan, you just sit silently until they answer. Sometimes, this tactic can result in some pretty awkward silences. They may be thinking about whether or not they intend to accept the offer.

However, many people interpret that incorrectly and come back with another offer right off the bat. When you experience silence, do not come back with a different offer just to break the awkwardness. Just wait until they say something, good or bad. Then you can make the appropriate adjustments to the offer. In getting a good commercial loan financing, do not be the first person to speak after you make an offer.

SME loans – with low success rate, it is important to work with trusted hands

5. Shop Around

One great way to get what you want is to shop around. When you shop at multiple lenders, you will have a much better chance to get what you want. Go to a number of different commercial lenders and see what they have to offer you. When you find one that you want to work with, use your shopping as leverage in negotiations.

The commercial lending business is very competitive. If you let them know that you are shopping around and have some estimates, they will be much more likely to accommodate you.

Use the other lender’s estimates as a way to leverage yourself into a good deal. For example, one lender might have lower closing costs than the other. Ask the lender that you are working with to match or beat the other lender’s closing costs. Sometimes it works and sometimes it does not, but it never hurts to try.

Mr Paul Ho, chief mortgage consultant at iCompareLoan said, “before you try to negotiate commercial loans, know one cardinal rule, ‘businesses need to borrow when they do not need money’.”

He added: “When your business is struggling and you need additional funding to tide over a tough patch, then you will find that your access to funding is completely cut off and end up with very expensive funding.”

To negotiate commercial loans be wise to plan 6 to 12 months ahead for any potential funding needs. Even if you do not need funding now, you may want to quickly refinance your home loans for any potential equity and stand-by cash even if you do not need it now.

Remember, banks assess your credit and affordability at the point of application, so you should apply when your status is good, not when you have further deteriorated. At that time, no banks will lend you.

You should also read more about the different types of funding. If your business is profitable and you only need short term funding, but your access to bank’s working capital is temporarily cut off, then you should consider personal loans as a source.

There are many factors to consider when you try to secure local business loans, and good negotiators can always tweak terms to have an advantage.

If you have to bargain business loans be mindful that loan specialists can be your best ally. They can set you up on a path that can get you the best personal loans in a quick and seamless manner. They can also arrange for the Best Home Equity Loans in Singapore as they have close links with the best lenders in town and can help you compare Singapore loans and settle for a package that best suits your needs.

The post Negotiate commercial loans to make sure that you are getting the best deal appeared first on iCompareLoan Resources.

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QC exemption will remove double whammy effect to some developers

Click on QC exemption will remove double whammy effect to some developers
for the source.
Author: Ravi Philemon

QC exemption will effectively remove the double whammy effect to some developers that have to contend with both the QC as well as the ABSD regimes, says CBRE

QC exemption

Image credit: Wikimedia Commons

On 6th February 2020, the Ministry of Law and Singapore Land Authority announced that the exemption of publicly listed housing developers with a substantial connection to Singapore from the Qualifying Certificate (QC) regime will be allowed.

Under the Residential Property Act (RPA), any housing developer that is not considered a Singapore company has to apply for a QC when it purchases residential land for development, other than from the government. Under the QC regime, it is required to complete the development within five years and dispose of all units within two years of completion. The extension charge payable for an extension of time is: 8% of the purchase price of the land for the first year extension, 16% for the second year of extension and 24% for the third and subsequent years. The number of unsold units will be taken into consideration when computing the charge. This is to ensure that such housing developers build and sell the residential units in a timely manner, and do not hoard and speculate in residential land.

A housing developer that is a Singapore company is not subject to the QC regime. Currently, a Singapore company is defined in the RPA as one that is incorporated in Singapore, and all its directors and shareholders are Singapore citizens or Singapore companies. This definition however means that publicly listed housing developers that are essentially Singaporean will not be considered a Singapore company. If they have one foreign shareholder, they will not be considered a Singapore company.

Publicly listed housing developers can apply for QC exemption on the basis that they have a substantial connection to Singapore.

The QC exemption application will be assessed by reference to the following criteria:

1. Incorporation in Singapore;
2. Primary listing is on the Singapore Exchange and principal place of business is Singapore;
3. The chairperson and the majority of the company’s board are Singapore citizens;
4. A significantly Singaporean substantial shareholding interest in the company; and
5. Track record in Singapore.

The QC exemption changes will be implemented with immediate effect and reflected in legislation later this year.

The government is making no changes to the existing property market cooling measures, which were put in place to keep private residential property price increases in line with economic fundamentals. In particular, all housing developers continue to be subject to the prevailing Additional Buyer’s Stamp Duty (ABSD) regime. The regime requires, among other conditions, developers to sell all units in a residential project within a specified timeline, failing which they will be subject to the ABSD.

CBRE Research’s Views on QC Exemption

“This exemption will effectively remove the double whammy effect to some developers that have to contend with both the QC as well as the ABSD regimes. Successful applicants of the exemption of the QC regime will still have to ensure that all units in their residential projects are sold within a specified timeline under the overarching ABSD regime. Going forward, as such listed companies may not be categorised as a foreign entity following a successful application, some of these listed developers will be given a respite to continue to participate in the acquisition of land in the near to mid term.

“This is a clear indicator that the government is constantly monitoring and fine tuning its policies. This policy further strengthens their support for local developers, as it is difficult to qualify listed developers as a 100% Singapore company.”

How to apply for a Qualifying Certificate?

You are required to submit an online application.  A non-refundable fee is payable.

Who can apply for a Qualifying Certificate (QC)?
A housing developer who intends to purchase restricted property to construct flats or dwelling house for sale.

A housing developer means:

  • (a) an individual who is not a Singapore citizen; or
  • a foreign company, a foreign limited liability partnership or a foreign society; or
  • a Singapore company, limited liability partnership or society which is not holding a clearance certificate.

What are the conditions attached to a QC?

  • Complete the construction and obtain the Temporary Occupation Permit or Certificate of Statutory Completion within 5 years from the date of issue of the QC or the collective sale order, whichever is applicable;
  • Dispose of all the residential units within 2 years from the date of issue of the Temporary Occupation Permit or Certificate of Statutory Completion, whichever is earlier;
  • Must not, without approval, change the shareholding of the housing developer after QC is issued;
  • Must not, without approval, sell the land in its vacant or undeveloped state; and
  • Provide security (Banker’s Guarantee of at least 10% of purchase price of land).

What if the housing developer is not able to complete the housing development within the 5-year period?
It is required to submit an online application for variation of condition for an extension of time to complete the housing development. A non-refundable application fee is payable. The extension charge payable for an extension of time is – 8% of the purchase price of the land for the first year extension, 16% for the second year of extension and 24% for the third and subsequent years.

What if the housing developer is not able to sell all the units in the development within the 2-year period?
It is required to submit an online application for variation of condition for an extension of time to dispose of the units in the development. A non-refundable application fee is payable. The extension charge payable for an extension of time is – 8% of the purchase price of the land for the first year extension, 16% for the second year of extension and 24% for the third and subsequent years. The number of unsold units will be taken into consideration when computing the charge.

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Seeing the impact of coronavirus on retailers in one day

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https://i0.wp.com/www.propertysoul.com/wp-content/uploads/2016/12/cropped-heading.jpg?fit=32%2C32&ssl=1 Author: Property Soul

Singapore moved up coronavirus outbreak alert to orange in the late afternoon last Friday. The next day I went for my routine trip to the wet market after my morning jog. It was crowded with people stocking up on food, especially frozen meat. Their market trolleys had completely blocked the entrance. I had no choice… [read more]

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2020 construction demand expected to remain strong in Singapore

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Author: Ravi Philemon

As Singapore’s 2020 construction demand is projected to remain strong, the Building & Construction Authority (BCA) urges the built environment sector to look ahead, invest in digitalisation, innovation-driven growth and groom local talent to tackle uptrend of larger and more complex projects

The Building and Construction Authority (BCA) projects the total construction demand (value of construction contracts to be awarded) to remain strong in 2020 with sustained public sector construction demand. The total construction demand is expected to range between S$28 billion and S$33 billion this year.

Public sector’s 2020 construction demand, which is expected to reach S$17.5 billion and S$20.5 billion, will make up about 60% of the projected demand.

Public sector construction demand is expected to be spurred by major infrastructure projects, which are larger and more complex in scale, such as the Integrated Waste Management Facility, infrastructure works for Changi Airport Terminal 5, Jurong Region MRT Line and Cross Island MRT Line.

Private sector’s 2020 construction demand is projected to be between S$10.5 billion and S$12.5 billion, supported by projects such as redevelopment of en-bloc sale sites, recreational developments at Mandai Park, Changi Airport new taxiway and berth facilities at Jurong Port and Tanjong Pagar Terminal. The forecast for 2020 excludes any construction contracts by the two Integrated Resorts (IRs) pending confirmation on the timeline and the phasing of the expansion projects.

Last year’s total construction demand expanded by 9.5% to reach S$33.4 billion, about S$1.4 billion higher than the upper bound of BCA’s 2019 forecast of S$27 billion to $32 billion, mainly due to a stronger than expected increase in industrial construction demand for petrochemical facilities despite the slowdown in manufacturing sector. Total preliminary construction demand last year for the public and private sector was S$19 billion and S$14.4 billion respectively.

Medium Term Forecast for 2021 to 2024

2020 construction demand

Public sector’s 2020 construction demand, which is expected to reach S$17.5 billion and S$20.5 billion, will make up about 60% of the projected demand for this year (Image: National Archives Singapore)

The 2020 construction demand is expected to hold steady over the medium term.

Demand is projected to reach between S$27 billion and S$34 billion per year for 2021 and 2022 and between S$28 billion and S$35 billion per year for 2023 and 2024. The public sector will continue to lead demand and is expected to contribute S$16 billion to S$20 billion per year from 2021 to 2024 with building projects and civil engineering works each taking up about half of the demand.

Besides public residential developments, public sector construction demand over the medium term will continue to be supported by various mega infrastructure projects. BCA expects private sector construction demand to stay at a moderate level in view of the likely continued global economic uncertainties and the current overhang in the supply of private residential housing units. Nonetheless, the planned expansion of the two Integrated Resorts could provide further upside to private sector demand, depending on their eventual construction timelines and phasing.

Construction Output

Total nominal construction output in 2020 is projected to increase to between S$30 billion and S$32 billion, from the estimated S$28 billion in 2019. The anticipated further pick-up in total construction output in 2020 is supported by the improved construction demand since 2018 following the slowdown in 2015 to 2017.

Year

 

Construction demand (Value of contracts awarded, S$billion) Construction Output (Value of certified progress payments, S$billion)
Public

 

Private

 

Total

 

Total

 

2019 p 19.0 14.4 33.4 28
2020 f 17.5 – 20.5 10.5 – 12.5 28 – 33 30 -32
2021 – 2022 f 16 – 20 per year 11 – 14 per year 27 – 34 per year
2022 – 2023 f 12 – 15 per year 28 – 35 per year

(p: Preliminary f: forecast)

Continuing our industry transformation efforts

Since the launch of the Construction Industry Transformation Map in 2017, the industry has been using newer and more advanced technologies to improve construction processes and methods and ultimately creating new and better jobs for those working in the sector. For example, more projects are adopting Design for Manufacturing and Assembly (DfMA), where a substantial portion of work is now done in a controlled manufacturing environment before it is transported to site for assembly. The DfMA adoption rate by the industry shows an improvement from 22% in 2018 to about 30% in 2019, which is a good progress towards the target of 40% by 2020.

The public sector, for example HDB, will continue to take the lead in adopting DfMA in their building projects where 75% of all its units launched in 2020 will adopt DfMA methods such as Prefabricated Pre-finished Volumetric Construction (PPVC) or Advanced Precast Concrete System (APCS).

PPVC refers to a construction method whereby 3-dimensional modules are completed with internal finishes, fixtures and fittings in an off-site manufacturing facility before it is delivered and installed on-site. The key benefits of PPVC include improved productivity, better construction environment and improved quality control

APCS refers to a construction method that adopts large precast concrete (PC) components and/ or the use of mechanical connection systems to join two or more PC components under the ‘3S’ principles of Standardisation, Simplicity and Single Integrated elements. The key benefits of APCS include ease of on-site assembly, improved productivity and improved quality control.

The transformation efforts have also led to the redesign or creation of new and better jobs, such as digital lead and DfMA production manager within the sector.

With the positive outlook in the medium term, Mr Zaqy Mohamad, Minister of State for National Development and Manpower, urged the industry to continue investing in a skilled and competent local workforce who will lead and drive the built environment sector into the future.

BCA is also working with industry partners on initiatives to attract more fresh graduates and mid-careers into the sector, as well as a skills framework to chart out career progression pathways which will be launched later this year.

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Business bankers give loans only to viable local companies

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Author: Ravi Philemon

A business banker recognises that local companies are important to community growth, creating jobs, advancing technology and contributing valuable tax dollars to the economy

 

By: Hitesh Khan/

Good lenders must first recognise that not only are small businesses are important, but that every company is different and requires customised financing. Good lenders will have the knowledge, expertise and the corporate resources to meet your needs, all at the high level of quality service that you can expect from the lender.

Lines of Credit

If you need the flexibility of access to capital, good lenders can design a line of credit program to suit your needs. Use it to better manage your cash flow, take advantage of special purchase opportunities, or for emergency situations.

A business banker who recognises that local companies are important, is able to offer revolving lines of credit, competitive interest rates, interest only payment options, and an easy extension process.

Secured and Unsecured Installment Loans

A term loan, either secured or unsecured, is most often the option that business customers choose when borrowing money to finance business needs.

Ask good lenders about financing for:

  • Equipment
  • Vehicles
  • Furniture and Fixtures
  • Inventory
  • Expansions
  • Debt Restructuring

Small businesses are important to community growth, creating jobs, advancing technology and contributing valuable tax dollars to the economy. To help small businesses compete in today’s competitive marketplace, good lenders often provide government guaranteed financing to qualified business borrowers.

Business loans are useful but consider alternatives before taking one

A partnership with a business banker benefits small-to-medium companies which think big and have the management experience to turn plans into reality.

If you have a worthwhile business expansion or investment need, good lenders have medium and long-term financing programs available at competitive rates. Such loans can be used for the following business purposes:

  • Construction of new commercial buildings
  • Purchase of existing land or buildings
  • Business acquisition
  • Renovation and improvements
  • Financing equipment, furniture or fixtures
  • Finance increase in inventory
  • Working capital

But before applying for loans, you should know what your business banker is looking for and prepare for it:

  • Character and credit history of the borrower
  • Loan documentation: financial statements, tax returns, and a business plan
  • Cash flow history and projections for the business
  • Collateral that is available to secure the loan

Get a credit report on yourself and your business. The smaller the business, the more closely the experience, know-how and overall character of the owner(s) will be evaluated. You are often judged on your personal credit – especially if your business does not have a long operating history.

You need to build a credit history to give banks an idea of how responsible you are – they will assume that you operate your business in the same manner that you manage your personal finances.

  • You need to monitor what banks see when they pull your credit report.
  • Check your credit report well in advance of seeking a loan because it can take up to four weeks for errors to be corrected.
  • Continually monitor your credit to check for errors or omissions.
  • Know your credit score. The higher the score, the lower risk you pose to lenders — and the lower interest rate you will be able to secure.
  • Every commercial lending application you submit will be listed on your credit record – if you are turned down by one lender, the next will see that you were declined already. Make sure to do everything you can to get it right the first time.

business bankerBe prepared to have several key documents on hand before you even set foot in a bank. These should include personal financial statements, tax returns, monthly cash flow projections, and a well-prepared business plan.

You will need financial statements for your business to show how much it’s worth and how much money you are making. Prepare detailed pro-forma statements. These give projections about what your business will be worth going forward. Be sure you have an updated business plan. Prepare a plan with as much detail as possible – including bios of you and your partners, your track record, your strategies and advantages, and more. Supply a well-organized plan of how you intend to use the loan.

5 tips for boosting your chances of getting personal loans

The most important component to a business banker is whether the business’s ongoing sales and collections represent a sufficient and regular source of cash for repayment on a loan. A business’s cash flow will usually include not only the money that goes in and out of the business from its operations (sales less expenses), but also any cash flow from investments or financial activities (e.g., payments and receipts of interest and dividends, long-term contracts, insurance, sales or purchase of machinery and other capital changes, leases, etc.)

You may need to provide collateral. Collateral may be defined as property that secures a loan or other debt, so that the property may be seized by the lender if the borrower fails to make proper payments on the loan.

More stringent personal loan restrictions to kick in from next year

In order to ensure that the particular collateral provides appropriate security, the lender will want to match the type of collateral with the loan being made. For example, the useful life of the collateral will typically have to exceed, or at least meet, the term of the loan. Consequently, short-term assets such as receivables and inventory will not be acceptable as security for a long-term loan, but they are appropriate for short-term financing such as a line of credit.

If you are searching for a business expansion loan, you should speak to loan consultants as they can set you up on a path that can get you a it in a quick and seamless manner. Loan consultants have close links with the best lenders in town and can help you compare various loans and settle for a package that best suits your needs.

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The Avenir (Freehold): Why is This Condo Drawing Lots of Public Interest?

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Author: iCompareLoan Editorial Team

Image Credits: The Avenir, by Carmel Development Pte. Ltd.

Located in District 09, River Valley Close, The Avenir is one of the newest condos that’s quickly attracting attention. The development which has a total of 376 units is unique in terms of design as well as amenities. It’s considered to be a cool sanctuary in the middle of the fast-paced city. But what exactly makes this condo stand out?

Unique Unit Layout and Luxurious Facilities

The developer of this new property launch, Carmel Development, took their time to design and construct this premium residential condo. Attention was definitely given to detail, resulting in a graceful and sophisticated development. It’s worth noting that the wares found in every residential unit are articulately installed and polished to complement the interior.

For starters, this condo has towers that are set at right angles. This helps to enhance privacy by minimizing the space between overlooking blocks. Additionally, this design also opens up the units to the surrounding environment giving residents clear views.

There are also landscaped decks and basement car parks. This frees a lot of ground space leaving room for a large garden. Some of the in-house provisions that you will find include kitchen cabinets and appliances, washer and dryer, sanitary ware, fridge, and others.

Other facilities include a picnic lounge, spice garden, social corner, social terrace, plus a clubhouse. Those who want to relax or enjoy some “me time” can make use of the quite alcove, relaxation pavilion, and the lazy lounge. For fitness and physical wellness, Avenir has a yoga deck, gym, swimming pool, meditation deck, and children’s playground among others.

Tranquil City Lifestyle

This new property launch offers its residents the much-needed tranquility. Although it’s less than five minutes away from the CBD, Avenir’s location guarantees a chilled vibe. It’s tranquil, modern, and leafy. You can conveniently relax in different outdoor spaces that provide a relaxing ambiance.

Convenience and Accessibility

Accessibility to amenities and convenience are some of the things that people look for when choosing residential units. To ensure that you can conveniently access different amenities, Avenir condo is located in a prime location in Singapore. It should be noted that nearly everything you need is within reach.

Do you want to relax in an outdoor space? Are you looking for a place where you can hang out with friends? Or are you interested in buying basic commodities for your household? Well, Avenir’s location is within the reach of supermarkets, food and beverage outlets, shops, and cafes among others.

There is a broad range of malls found within a walking distance from this condo. They include the Great World City Mall that’s less than a 10-minute walk away. Other shopping outlets include the Liang Court and Valley Point. For those who love to wine and dine, Publico and La Maison du Whisky are nearby. In addition to those, there is a kitchen bar and a super loco restaurant.

Attractive sites such as Fort Canning Park provides an amazing space to relax. This iconic green space helps to refresh the mind and rejuvenate the body. It’s a great outdoor space where you can embrace nature and escape from the hectic city lifestyle.

Overall, you will be spoilt for choice. It doesn’t matter if you want to shop, dine, or just looking for entertainment. You have access to a broad range of options to choose from depending on your needs and preferences.

Enhanced Transportation and Learning Institutions

Whether you want to get to other parts of Singapore or to the neighborhoods, you don’t need to worry. Avenir’s location is in close proximity to various MRT Stations. They include Somerset, Newton, Dhoby, and Ghaut. You can also use the bus service and if you have a car, the major roads and expressways will definitely provide you with easier accessibility.

It’s worth noting that District 9 has some of the best schools in Singapore. So, if you kids who go to school, there are multiple elite institutions you can choose from. They include ACT 3 International, River Valley Primary, Gang Eng Seng, and Chatsworth International among others.

There is no doubt the Avenir has a lot to offer. Its location is serene and well-secluded. Because of the high level of interest it has produced, we advise interested homeowners to first analyze their finances. To ensure that you get the best loans, iCompareLoan mortgage broker offers the best free financial solutions, especially if you want to compare Singapore housing loans.

By using iCompareLoan Mortgage broker, you can quickly find the best mortgage loans that suit your needs. This platform gives you an option to compare mortgage loan Singapore based on different bank rates. Besides that, you can easily calculate your mortgage repayment plan!

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