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February 6, 2023

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How Much Capital Do You Need as a Startup in Singapore

5 min read

When starting a business in Singapore, one of the first things you need to decide is how much initial capital you want to invest in your business. The minimum requirement is set by the Accounting and Corporate Regulatory Authority (ACRA) and will depend entirely on the type of business you wish to register as. For example, businesses registered in which owners are personally liable for debts incurred require no specific amount of capital while private limited companies have a requirement of $1 SGD. However, the minimum requirement is only a starting point. Thinking beyond this starting point when deciding how much capital need helps you build a solid foundation before you’ve even started operations. In this article we cover points to consider when determining your initial investment and methods for raising that capital.

How to Decide Your Initial Capital Investment

  • The size and scope of your business: The amount of capital that you need will depend on the size and scope of your business. If you are planning to start a small business that operates on a modest scale, you may not need a large amount of capital. Larger business or ones that require significant ongoing investment need a larger amount of capital to support growth.
  • Your business model and revenue streams: If your business relies on a single revenue stream, you will want a larger amount of capital to cover your costs and expenses. Having multiple revenue streams may allow you to sustain your business with a smaller amount of capital.
  • Your goals and objectives: If you are planning to grow your business rapidly and expand into new markets, a larger amount of capital can help you to support that growth. A more cautious approach that plans on slower growth might let you get by with a smaller amount of capital.
  • Your personal financial situation: If you have access to personal savings or other personal financial resources, you can use these to support your business. Alternatively, if you plan to rely on external sources for funding, such as loans or investments, you may need to raise a larger amount of capital to secure this financing.

Get a free estimate for funds to grow your business.

Raising Capital for Your business

There are several ways to raise capital for your business, including:

  • Personal savings: One of the most common ways to raise capital is to use personal savings or other personal resources to finance it personally. This can be a good option if you have solid financial footing and are comfortable using your personal resources to fund your business.
  • External Investors: Another option is to seek investment from external sources, such as venture capitalists, angel investors, or crowdfunding platforms. This can be a good option if you are looking to raise a large amount of capital quickly, but it may also come with strings attached, such as giving up equity in your business.
  • Loans: You can also raise capital through loans (e.g., bank loans), government grants, or other financing programs. This can be a good option if you are looking to raise a moderate amount of capital, but it may also come with interest and repayment obligations.
  • Revenue-Based Financing: At Jenfi, we offer revenue-based financing. This new type of financing offer means that you get flexible loans where the repayment terms scale up or down depending on your earnings. If you’re interested in learning more, feel free to check our requirements and apply today!

The amount of capital that you should have when starting a business in Singapore depends on a variety of factors, these include:

  • your business structure, size, and scope
  • your business model and revenue streams
  • your goals and objectives
  • your personal financial situation

By considering these factors and exploring different options for raising capital, you can determine the amount of that is right for your initial investment.

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