Established in 2018, local professional cleaning company Cleaning Works saw a spike in demand for its services as the pandemic swept through Singapore.

To meet this surge, it needed to hire more employees and purchase more equipment. However, delayed payment from customers meant that the company's cash flow was affected.

With Flex PLUS, companies like Cleaning Works can access interest-free, on-demand working capital.

"Flex PLUS helped to boost our working capital. Expanding the business at such a time was possible as the increase in available funds ensured that our cash flow was not affected," says Ms Farhanah Amran, director at Cleaning Works.

Like Cleaning Works, more SMEs are turning to alternative lines of credit. Gone are the days of having to jump through multiple layers of stringent regulatory hoops just to secure a business loan.

Securing a line of credit has been made easier with the launch of Flex PLUS. Launched by Flex, a Singapore-based fintech firm founded in 2021, Flex PLUS offers SMEs up to S$500,000 to boost their working capital and up to a 35-day interest-free payment term with minimal documentation needed. The business loan is usually approved and disbursed within 48 hours.

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Dr Tan Sian Wee, co-founder and group chief executive officer of Finaxar Holdings, notes, "We designed Flex with SMEs in mind, so that they can focus on the growth of their business while managing expenses with peace of mind. Our mission is to level the playing field for SMEs to access better financial services."

Fuelling SMEs' ability to expand

Representing about 99 per cent of enterprises in Singapore in 2020, SMEs make up the backbone of the local economy. Recognising this, the Government has also disbursed significant aid over the past two years to support SMEs affected by the pandemic.

As economic recovery ramps up, SMEs need sufficient working capital to sustain cash flow for expenses and scale their business to keep pace.

Business growth can look different, depending on the role you play in the market, be it a supplier or client. It is often accompanied by more payments to suppliers and growing numbers of employees hired. There could also be an increase in overhead costs, such as renting larger offices or additional equipment.

Unfortunately, the pandemic caused a bit of a snowball effect. Payments may still be delayed as the global situation has yet to stabilise. Global supply chains are also being disrupted, while closer to home, electricity prices are up, which means higher running costs.

Due to the pandemic, snowballing effects have disrupted payments, causing the expansion plans of many SMEs to halt as they lack cash reserves to dip into.

Mr Josh Jefferson Tan, a director from the Hospitality & Tourism Training Centre, says, "Working capital is always a concern for businesses, whether you're a big or small SME. The challenge we face is the constant need to maintain a certain amount that must be reflected in our bank statement to prove to the financial institutions that the business is doing well. However, at times payment doesn't come in on time."

Thus, an SME facing a cash flow crunch is likely to face difficulties securing a bank loan. A study by Mambu found that 68 per cent of SMEs in South-east Asia struggled to secure sufficient, or any, funding from a bank on at least one or more occasions in the last five years.

The majority 40 per cent of these businesses were experiencing cash flow issues, and more than 38 per cent could not launch new products or services, while 36 per cent were unable to hire effectively as a result.

Citing results of a 2021 survey commissioned by Flex, CEO Dr Tan shares that, "76 per cent of SMEs say the biggest challenge in accessing short-term loans was the long and complicated application process."

"This impedes their ability to access cash flow in order to fund their business for growth." Combined with the extensive requirement for financial documents (53 per cent), high-interest rates (34 per cent) and processing fees (22 per cent), SMEs have found accessing credit a real challenge for their business.

It hardly comes as a surprise that SMEs, which are largely underserved by banks, are open to switching to an alternative line of credit - which is where Flex PLUS comes in. With this on-demand line of credit, SMEs can get quick access to working capital.

"With Flex PLUS, the Hospitality & Tourism Training Centre received a boost in cash flow, which helped us to move the business forward without a headache," says Mr Tan.

Flex PLUS' simple application process and quick approval is a stark contrast to what SMEs traditionally face - which could include a pile of paperwork to get through and a waiting time of over 30 days for a short-term loan to be disbursed.

Integrated payment solutions for SMEs

Complementing the Flex PLUS line of credit is the Flex Visa Business Card, which SMEs are entitled to when they sign up for the former.

With the card, SMEs can make payments through Business Payments Solution Providers (BPSP) ipaymy and CardUp. These two platforms allow companies to make credit payments to merchants that typically do not accept credit cards as payments, preventing them from dipping into their cash reserves.

SMEs can pay for outstanding costs - including rent, salaries, invoices and tax - with the all-in-one Flex Visa Business Card through these partner platforms. With the line on credit provisioned through a Flex Visa Business Card, paymens can be made with the credit disbursed from the Flex PLUS loan, which means that SMEs need not draw on existing reserves.

Much like a company-issued Visa card, the Flex Visa Business Card can be used for both online and offline payments with card-accepting merchants. Business owners can also issue up to 20 free physical and an unlimited number of virtual cards to employees who often need to make payments.

As a digital payments solution, integrated with the Flex Visa Business Card are spending controls to manage budgets and a receipt capture function to help with expense reporting. Flex is also fully compatible with the Xero ecosystem, allowing seamless accounting.

What's more, the processing fee for both ipaymy and CardUp is pegged at 1.8% per transaction (Usual rates for ipaymy and CardUp are u.p. 2.25% and 2.6% respectively.)

Sign up for Flex PLUS and get S$5,000 credit in 24 hours, or up to S$500,000* in 48 hours. All you need is a minimum of one month's bank statement to begin. Sign up in just 10 minutes and enjoy up to 35 days of interest-free credit. Visit https://www.flexnow.co/plus for more information.

*Terms and conditions apply. Credit lines are subject to approval.