Not sitting idle: Free up working capital by tapping previously unlocked assets via securities backed financing and insurance policy backed financing. Photo credit: Unsplash
In a volatile, uncertain, complex and ambiguous (VUCA) world, every bit of security you can get counts.
But it’s hard to feel secure when virus mutations keep wreaking havoc and supply chains continue to be disrupted across the world.
As an SME owner, one of the best things you can do for your business is freeing up working capital by tapping previously unlocked assets, namely held shares and insurance policies that you can then use for SME financing or even to finance your startup idea.
Phillip Credit, a licensed moneylender and a subsidiary of PhillipCapital, offers two more options: securities backed financing and insurance policy backed financing.
With a global presence, PhillipCapital is an integrated Asian financial house that provides a comprehensive suite of solutions for individuals, family offices, as well as corporate and institutional clients.
Here are a few things you can expect from Phillip Credit:
● Customized packages
● Fast, convenient and simple application process
● Low interest rates
● No hidden fees
● No penalty or cancellation fees
● Protection and security of your data
Basically, Phillip Credit offers two main categories of loans – term loans and revolving loans.
Term loans work on a principal and interest repayment scheme, while revolving loans have an interest “first” based repayment scheme. The former offers fixed monthly repayment amounts, while the latter allows for flexible repayments.
In addition, Phillip Credit also offers these four main products:
● Insurance policy backed financing
For this article, we will be focusing on two relatively new types of financing – securities backed financing and insurance policy backed financing.
What it is: A way to obtain liquidity from your investments by taking a loan against its investment value with Phillip Credit.
Collateral or assets that you can use: Shares, unit trusts, bonds and money market funds (an open-ended mutual fund that specializes in short-term debt securities).
Loan-to-value (LTV) ratio: Depending on the security type, up to 70% of the assets' market value. For example, if the market value of Share A is $1,000, financing of up to $700 may be offered.
How it works: Two types of loans are available – term loans and revolving loans.
Max and min quantum: Min $50,000, or max of up to 2x of your annual income or 2x assets with Phillip.
Max tenor: 2 years
Estimated interest: Subject to prevailing rate, approximately 2-3% per annum
Eligibility: You need to be at least 21 years old, employed, and a Singaporean citizen, permanent resident, or foreigner with a valid pass.
Documents needed: Your NRIC, last 3 months’ payslips, 12 months’ CPF transactions, NOAs from the last 2 years, and supporting documents for the collateral.
Benefits:
What it is: A way to unlock the existing value in your in-force insurance policy without giving up the protection and perks that the policy offers.
Collateral or assets that you can use: This is only applicable to fully paid insurance policies with a surrender value, and which were issued by reputable insurance companies.
Loan-to-value (LTV) ratio: Up to 90% of the latest guaranteed surrender value.
However, the final financing amount will depend on the insurance policy’s latest guaranteed surrender value, while the LTV ratio will depend on the type of policy, and the company that issued the policy.
For example, if the latest surrender value of Policy A issued by a reputable insurance company is $1,000, the maximum amount of financing you can get is $900.
The policyholder agrees to assign the policy to Phillip Credit as collateral in return for financing. If the insurance policy matures or is surrendered, or in the event of the policyholder’s death, Phillip Credit will be paid by the insurance company.
This payout will be used to settle the financed amount and the outstanding interest (if any) and the remainder of the proceeds will be returned to the policy owner or beneficiary.
How it works: Again, both term loans and revolving loans are available (similar to securities backed financing).
Max and min quantum: Min $50,000, or max of up to 2x of your annual income or 2x assets with Phillip.
Max tenor: 2 years
Estimated interest: Subject to prevailing rate, approximately 2-3% per annum
Eligibility: You need to be at least 21 years old, employed, and a Singaporean citizen, permanent resident, or foreigner with a valid pass.
Documents needed: Your NRIC, last 3 months’ payslips, 12 months’ CPF transactions, NOAs from the last 2 years, and supporting documents for the collateral.
Benefits:
Phillip Credit is now on Lendingpot’s partner network of more than 45 lenders. First, register for an account with Lendingpot. Next, fill in your loan application using Myinfo business.
Tick either the shares or insurance option to collaterize in the application, and your application will be directed to Phillip Credit. It’s that simple!
Life is unpredictable, and in an increasingly VUCA world, you may find yourself needing funds urgently for SME financing with little or no notice to spare.
So if you happen to have both these types of assets or collateral on hand - why not leverage on your insurance policy or investment assets?
You don’t have to surrender your insurance policy or give up your insurance assets to enjoy the additional cash that securities backed financing and insurance policy backed financing will provide.
There is also quite a lot of flexibility afforded as you get to choose between a term loan or revolving loan for both types of financing.
That said, do bear in mind that how much cash you can get depends on whether your insurance policy was issued by a reputable insurance company and if your investment assets have good market value.
Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore for free. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.
Get more loan options for free. We have 45 lenders onboard our digital business loan marketplace to help you.
Belinda loves thinking about random stuff, and collecting useless bits of facts and trivia. She often roots for the underdog, and believes the world needs more happy endings.
