How to Get a Business Loan to Start a Shipping Container Company in Singapore

Business Loan to Start a Shipping Container Company in Singapore
Credit: iStock

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Singapore is one of the busiest shipping and logistics hubs in the world. With its strategic location along major east-west shipping routes and world-class port infrastructure, many entrepreneurs are interested in starting a shipping container or logistics company here. However, these capital-intensive businesses often require sizable upfront investments.

This guide will explore the financing options for getting a Business Loan to Start a Shipping Container Company in Singapore. We’ll compare the top banks and lending programs, explain what funders look for in a loan application, discuss tips for securing financing, and answer frequently asked questions.

Comparing Top Logistics and Shipping Companies in Singapore

The logistics industry in Singapore is thriving with many large players competing for market share. Before applying for a business loan, it’s helpful to understand the competitive landscape and target specific niches or services.

Here is an overview of major logistics and shipping container companies in Singapore to compare:

Logistics Companies

CompanyServicesMarket Position
Nippon Express SingaporeFreight forwarding, sea/air freight, contract logisticsTop global logistics provider with extensive Asia-Pacific networks
Kerry LogisticsFreight forwarding, contract logistics, ecommerce fulfilmentLeading pan-Asian logistics firm with trading and marine services
Yusen LogisticsFreight forwarding, warehousing, distributionMajor Japanese-owned global 3PL with specialty logistics services
CEVA LogisticsContract logistics, freight forwardingTop 10 global logistics firm with integrated supply chain solutions
DSVAir/sea freight, oversized cargo, dangerous goodsEuropean transport provider with worldwide integrated logistics

Shipping Container Companies

CompanyServicesMarket Position
Taylor Tank ContainersTank container leasing/sales, maintenanceGlobal leader specializing in bulk liquid shipping tanks
Hoover FergusonContainer rental/sales, modificationsMajor chemical tank container engineering, fabrication, and services
OEG OffshoreCargo carrying units sales/rental, modificationsLeading provider of offshore containers and related services
TLS OffshoreShipping container sales and modificationsTop regional supplier of offshore DNV containers
Hurricane SafetyShipping container modificationsSpecializes in custom safety and environmental testing containers

This overview shows that both logistics and shipping container companies in Singapore span a wide range of niched services, from broad supply chain solutions to very specialized cargo transport options. When applying for financing, be ready to explain your specific competitive advantage.

Read Also: Top 5 Shipbuilding Companies in the Philippines

Comparing Business Loan to Start a Shipping Container Company in Singapore

Business Loan to Start a Shipping Container Company in Singapore
Credit: iStock

Several loan and financing options are available to fund new or growing logistics and shipping container companies in Singapore, each with different terms and qualifications. Major programs to compare include:

Banks and Financing Firms

  • OCBC Business First Loan
  • UOB Business Loan
  • DBS Business Loan
  • Maybank Business Loan
  • Validus Capital Financing

Government SME Loan Schemes

  • Loan Insurance Scheme (LIS)
  • Temporary Bridging Loan Programme (TBLP)
  • Working Capital Loan
  • Enterprise Financing Scheme

International Financing

  • International Finance Corporation (IFC) Loans
  • ADB Project Finance Program
  • Export Credit Agency Loans

The table below summarizes key features of these major small business loan programs in Singapore:

Lender/SchemeKey Features
OCBC Business First Loan– Up to $300K for new startups
– Competitive 8% interest over 5 years
– 75% government guarantee
UOB Business Loan– Minimum 2 years in business
– Up to $5M limit
– Attractive below 10% rates
Loan Insurance Scheme (LIS)– Government insures loans < $500k
– Below 7% interest rates
– 85% coverage on defaults
IFC Financing– $2M to $100M range
– 7-15 year financing terms
– Focus on environmentally sustainable projects

As the table shows, government-supported programs through agencies like Enterprise Singapore often offer the lowest interest rates and most favorable terms for small and new businesses in eligible industries like logistics. Bank business loans provide more flexibility for larger, more established companies.

International financiers like the IFC fund much higher amounts for major commercial expansion projects that also demonstrate sustainability impacts aligned with global ESG initiatives.

What Funders Look For When Financing Shipping Container Startups

When applying for a shipping container business loan, funders will assess various aspects of your venture to determine risk levels and growth prospects.

Criteria financial institutions commonly evaluate include:

  • Business Plan and Financial Projections – A solid strategy and 5-year profit/loss forecast are essential. Define your target market, route density projections, fleet scale-up goals, and investment timeframes for achieving self-sufficiency.
  • Management Team Resumes – For startup financing especially, lenders scrutinize the experience and capabilities of founding teams running the company. Highlight your industry expertise.
  • New versus Existing Company – Existing firms with 2+ years of operations can show profitability trends for better loan term qualification. Startups require more advisory support.
  • Assets for Collateral – Lenders prefer established companies with assets like real estate, inventory, accounts receivable, and equipment to secure lending risk. Guarantees also help.
  • Industry Growth Prospects – Logistics and shipping container remain resilient, high-growth sectors given Singapore’s massive international trade flows. Play up market tailwinds.

Read Also: Top Cargo and Freight Companies in Greenland

In addition to strong financials and operations, clearly convey why your management team and targeted services make your container shipping company uniquely poised for success relative to peers.

Tips for Securing Startup Financing More Easily

If you’re launching a new shipping container business in Singapore, follow these tips to strengthen your chances of securing that crucial startup loan or investment:

Seek Government SME Assistance

Government small business grant and loan programs provide mentoring support plus access to funding options with better terms versus private sector financing.

For example, Singapore Enterprise SG helps develop capable and competitive local SMEs through capabilities and innovation, access to markets and partnerships, productivity and manpower, and financing support.

Join Logistics Industry Groups

Actively network with groups like the Singapore Logistics Association (SLA) and SME Centre @ SMF to exchange ideas with industry peers and learn about assistance programs.

Highlight Your Niche Advantage

A new container company needs a sharp specialty differentiator. This could involve geographic trade lane dominance, a patented container modification, route optimization software, or warehousing automation processes unavailable to competitors.

Offer Personal Guarantees

While risky, personally guaranteeing some portion of a business loan amount can provide funders more confidence in your commitment to making the venture successful. Startup owners should be willing to back their ambitions.

Seek Investor Capital

Besides debt financing loans, also consider approaching angel investors and VC funds focused specifically on logistics startups. Their capital injections don’t require repayment if your company succeeds.

With the right business plan, management capabilities, niche advantages and financing mix, any promising logistics startup can secure growth funding in Singapore’s vibrant economy.

Frequently Asked Questions (FAQs)

What are typical shipping container business loan interest rates in Singapore?
For small business loans of less than $300K from banks like OCBC and UOB, expect rates around 8-12% over 5 years. Government SME loan programs offer below 7%.

What collateral do lenders require for container company loans?
Banks prefer hard assets like property, equipment, vehicles and inventory to secure loans. New businesses can provide personal guarantees from directors or equity shares as additional collateral.

How much investment funding is recommended to launch a shipping container business?
Including working capital needs before profitability, realistic startup costs often range from $150K to $500K depending on your niche, warehouse requirements, staffing, and equipment investments.

What Singapore government loan programs support new logistics SMEs?
Major options include the Loan Insurance Scheme (LIS), Local Enterprise Finance Scheme (LEFS), and the Temporary Bridging Loan Programme (TBLP). Enterprise Singapore helps administer them.

Should I seek debt or equity financing for my container company?
Debt like loans must be repaid with interest, but you maintain control. Equity like angel investing results in loss of some ownership and control, but carries higher risk for investors. Startups often need both.

How do I demonstrate my shipping container niche advantage to investors?
Clearly highlight proprietary technology, innovations, route dominance strategies, and team experience unmatched by competitors. Investors seek durable differentiation barriers supporting long-term profitability.

How long does it take to qualify and secure startup financing?
After prepping a solid business plan and financial model, expect 2-3 months to have funding applications reviewed, risk assessed, terms negotiated, and financing proceeds disbursed to your account.

Should I hire a proposal writer to apply for my business loan?
Experienced grant and funding proposal writers optimized for your targeted lender increase approval success rates. Fees range $2000-$5000 but often provide a positive ROI if they secure financing.

What financial information is required in a container business loan application?
Lenders will review 3 years of income statements, balance sheets, cash flow projections, personal financial statements from directors, business asset/liability listings, and personal credit reports to assess risk.

Starting and growing a competitive shipping container or logistics company requires significant capital. By understanding Singapore financing options and presenting funders with solid growth plans backed by strong management teams, entrepreneurs can secure the necessary loans and investment to build Asia-leading industry players.

Advertorial: This post contains sponsored content, advertisements, or affiliate links. Read our full advertorial disclosure here.

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