Loan Insurance Scheme (LIS) and LIS+

Overview  Criteria  Participating Financial Institutions  How to apply?

Overview

LIS insures your loans against default risks. The insurance premiums will be co-shared between the government and your enterprise. LIS+ is a complementary programme to LIS, where the government will co-share in the risk of new loans which are beyond the capacity of current LIS insurers for a one-year period.

Summary of LIS and LIS+

Use of Funds	Secured working capital (e.g. against receivables)
Maximum Loan Quantum	LIS No maximum loan quantum LIS+ S$5 million per borrower group
Eligible Companies	All companies
Premium Rate and Interest Rate (and loan tenure)	LIS To be determined by the insurer based on the risk profile of borrower (Singapore Government provides premium support of 50%). LIS+ 1.5% p.a. (on amount insured by government) The interest rate charged throughout the tenure of loans will be either fixed or floating, depending on the option which best suits your business needs.
* PFI: Participating Financial Institution

Loan Facilities

LIS supports both domestic trade and overseas trade facilities.

Types of Loan Facilities	Domestic Trade Facilities	Overseas Trade Facilities
Inventory/Stock Financing	Yes	Yes
Structured Pre-delivery Working Capital (including Revolving Working Capital)	Yes	Yes
Factoring/Bill or Invoice or accounts receivable discounting with recourse	Yes	Yes
Overseas Working Capital Loans Support Facilities via Standby Letter of Credit or credit facilities made by Lender through its inter-branch cover letter (Only for above listed facilities)	No	Yes
Banker's Guarantee (Tied to Project Financing)	Yes	Yes

Criteria

You may apply for the LIS Scheme if your company meets these criteria :

Facilities for Domestic trade

• at least 30% local shareholding; 
• company's group annual sales of not more than $100 million or company's group employment size not more than 200 workers*

* Annual sales turnover and employment size will be computed on a group basis.
(i.e All levels up for corporate shareholders holding >50% of total shareholding of the applicant company and any subsequent corporate parents, and subsidiaries all levels down)

Facilities for Overseas trade

• Singapore-based with 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.
• Group Turnover Cap
  - Non-Trading companies : =< $300 million
  - Trading companies : =< $500 million

For companies applying for both domestic and export facilities, you will have to meet both set of criteria as described above.

Participating Financial Institutions

Banks	Contact Numbers
DBS Bank Limited	1800 222 2200
GE Commercial Financing (Singapore) Ltd	6226 3822
The Hongkong and Shanghai Banking Corporation Limited	6216 9000
Hong Leong Finance Limited	6415 9640
Maybank	6292 4237
Oversea-Chinese Banking Corporation Limited	6538 1111
Standard Chartered Bank	1800 743 3000
The Bank of East Asia, Limited	6602 7702

How to apply?

Before you apply

1. Ensure that your business qualifies for the loan.
2. Consult your banker or one of the LIS Participating Financial Institutions. They will be able to give you professional advice and also assist your application.
3. Prepare the supporting documents if your bank requires them :
   
   • a copy of your business profile from ACRA
   • audited accounts or certified financial statements
   • bank statements
   • personal income tax assessment of owners and directors
4. Meet with your banker or financial institution. Bring the supporting documents for the meeting.

Applying for LIS

5. Obtain an Application Form from your banker or financial institution. Find out from the lender what supporting documents you need to attach.
6. Submit the Application Form with the supporting documents.
7. Wait 3 weeks for the bank or financial institution to reply. Processing of applications may be longer depending on the size of the loan and other factors.

Upon successful application

8. Pay 50% of the insurance premium.
9. Receive funds from the bank or financial institution.
10. Keep proper records of repayments. Repayments start 1 month after disbursement of the loan.
11. Ensure you make repayments on time.