Medipreneur loan package comparison

One of the main reasons why many healthcare startups fail prematurely in Singapore is the lack of enough capital to fulfill their business goals or expand sufficiently. That is why you need sound financial strategies to start up your clinic or expand your practices.

Between the two general sources of funding, bank loans and investors, many of the bank loans may not apply to start-ups. However, OCBC bank has launched a holistic loan package for Medipreneurs (a fusion of 'medical' and 'entrepreneurs') to meet your “start-up, renovation, working capital, and clinic acquisition needs”.

This article will bring you through a detailed comparison between the OCBC medipreneur loan package and other available loan packages for SMEs in Singapore to help you make better decisions in designing your financial strategies.

Below are some of the best loan package options for medipreneurs and doctors looking to start their own practice and clinics.

OCBC Medipreneur Loan Package
Covid-19 relief loan (Government assisted scheme)
OCBC Business First Loan
DBS business loan
Working Capital Loan

OCBC Medipreneur Loan

The loan package for Medipreneurs is a quick and painless financing solution for every healthcare professional who is looking to start a clinic or expanding business.

There is no need for a business track record or financial records to apply for the loan, which is a first of its kind loan.

For western and non-western clinics, the loan can be up to $150,000
For dental, aesthetics and specialists' clinics, it can be up to $300,000.

If you want to move into your new clinic as soon as possible, the package also includes OCBC rental bonds, which are underwritten by Great Eastern General Insurance Limited, to allow you to rent the new place not only without delay but also without having to pay a hefty security deposit.

Read more about the OCBC Medipreneur loan

Covid-19 Relief Loan (Government-assisted)

The Covid-19 relief loan is the best loan pack for Medipreneur SMEs during the pandemic. It is a government-assisted loan scheme offered by most major banks in Singapore. There are mainly 2 loans offered in this package:

Temporary Bridging Loan

SME Working Capital Loan

The Temporary Bridging Loan (TBL) is the one you need to look at. Since the SME Working Capital Loan is only applicable after you have exhausted the loan quantum of Temporary Bridging Loan.

If the Medipreneur loan offered by OCBC isn’t ideal for your practice. TBL is your best alternative. You can loan up to $3 Million per borrower, aggregated across all participating financial institutions, which is more than sufficient for a solo practice, or even a small clinic group. Its interest rate is at 3.7% per annum, and you can repay it over a period of 5 years. No collaterals required.

To be eligible for TBL, your practice needs to be registered and operating in Singapore with at least 30% local shareholding by a Singaporean or SPR.

The TBL is offered due to the COVID-19 pandemic. It’s the best loan for medical SMEs at the moment. You can even enjoy pre-payment fee waiver. The only downside is, since it’s a government assisted scheme, it’s only available until 31st March 2022.

OCBC Business First Loan

Besides the OCBC loan package that is particularly for Medipreneurs, doctors and practitioners can also consider the OCBC Business First Loan, which is a government-assisted loan for SMEs.

Business First Loan is for businesses that are registered and operating in Singapore between 6 months and 2 years and have at least 30% owned by Singaporean or Singapore PR.

One of the eligibility criteria is that your practice need to have no more than 10 employees or annual turnover does not exceed S$1 million.

You also need guarantors to apply for this loan. At least one guarantor must be Singaporean or Singapore PR (aged between 21 and 62), and the guarantors are required to have a minimum income of S$30,000 per annum.

It is also a fast online application by auto-filling your details via MyInfo (SingPass) with no paperwork needed.

It costs little too, with attractive interest rates and repayment over 4 years.

Read more about the OCBC Business First Loan

DBS Business Loan

If your medical practice failed to qualify for the COVID-19 relief loan or your application was rejected, the DBS business loan could be another option for you.

Open for all SME businesses, you can borrow up to $500,000 with a repayment period of up to 5 years. Although the interest rate is a little high at 9% per annum.

The exact eligibility criteria aren’t revealed for this loan, but you are expected to have a certain operational period and revenue record to quality for this loan.

Do also note that if you wish to make an early pre-payment for this loan within the first 2 years, you will have to pay a fee of 2.5% on the principal amount prepaid.

Working Capital Loan

Working Capital Loan may not be suitable for funding to start up your clinic from the scratch but is applicable if you are looking to expand your practices and manage your working capital better.

To be eligible for this loan, your medical business must be incorporated in Singapore for at least 2 years, with at least 30% Singaporean or PR shareholding, and group annual sales of less or equal to S$100m or group employment size less or equal to 200^.

This loan can get you a sum of up to S$300,000, with a tenor up to 5 years.

One good thing about this loan is that it gives you full disbursement of funds at the start and no early redemption fees are needed.

It is also collateral-free. However, guarantor(s) is/are needed to support the loan.

Conclusion

Financing is always a crux for any start-up, though not the only one.

But don’t be stressed out. You can read more on our complete guide to starting a clinic in Singapore including details on how to draft your business plan, hire the right people, and pass MOH inspection. Our UNO Tech team is also here to help!