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Corporate Loans
Paying cash costs liquidity. Financing costs interest and commitment. The right answer depends on the asset's working life.
Asset value, accounting treatment, tax treatment, grants and financing terms all need to be checked by a qualified professional for your specific case. Nothing here is tax or accounting advice.
Write down the operating problem the equipment solves, the additional capacity or cost saving you expect, the date it becomes productive, expected utilisation, the customer demand supporting the purchase, what happens if you delay, and any other way of obtaining the same capacity.
Avoid starting from the supplier's promotional monthly figure. Establish first whether the asset creates enough operational value to be worth having at all.
Include the purchase price, deposit, shipping and import GST and any applicable duty, delivery and installation, testing and commissioning, training, software or integration, maintenance and consumables, insurance, downtime during the changeover, repairs, and eventual disposal.
A cheaper machine with high downtime or maintenance can cost considerably more across its working life.
Benefits may include increased output, reduced labour or waste, lower subcontracting cost, improved quality, the ability to accept new work, or less downtime than the equipment being replaced.
Separate savings you can evidence from revenue you are hoping for. If there is no committed demand for the extra capacity, model lower utilisation and see whether the case still holds.
A cash purchase avoids interest and financing fees and may simplify ownership. It also removes the cash immediately and can reduce the reserve available for payroll, tax, suppliers and unexpected repairs.
Calculate the lowest cash balance after the purchase, in both the base and downside case: Build a rolling 13-week cash-flow forecast
Cash is not free if spending it leaves the business exposed to an ordinary delay or a routine shock.
A financing structure may involve a deposit or down payment, periodic instalments, fixed or floating or flat or reducing-balance interest, processing and legal and other fees, security over the asset or other property, personal or corporate guarantees, insurance requirements, early-repayment or termination charges, and a final larger payment at the end.
Use the actual schedule and the written terms. Compare net cash flows across the full period rather than comparing the deposit against the purchase price.
The obligation should not outlive the value it finances. If the asset becomes obsolete, uneconomic or unusable before the facility ends, the business keeps paying for value that no longer exists.
A very short tenure can be equally unsuitable if repayments begin before installation is finished and the productivity benefit has appeared.
Compare the installation and ramp-up date, a conservative estimate of working life, the maintenance cycle, likely resale value, the facility maturity, and the timing of the operating benefits.
Model installation delayed by three months, utilisation 20% below plan, lower customer demand, higher maintenance cost, a major breakdown, no additional revenue at all during the first period, and a rate increase where the rate can move.
Can the existing business still meet the repayments and its essential commitments? If not, consider a smaller machine, a staged purchase, leasing or rental, outsourced capacity, firmer customer commitments, or waiting.
A business may investigate grants or government-supported financing, but should not build that support into the funding plan until eligibility and approval are confirmed.
Enterprise Singapore states that the EFS SME Fixed Assets Loan can support investment in fixed assets in Singapore and overseas. That includes buying new or second-hand equipment and machines for automation and upgrading, and also buying or constructing factories and business premises — so it is broader than equipment alone.
As checked on 3 August 2026, Enterprise Singapore publishes a maximum repayment period of 15 years for this facility. On loan size, it does not publish a separate cap for this loan: instead, borrowing sits under an overall limit of S$50 million per borrower group across all Enterprise Financing Scheme facilities combined.
That distinction matters. The S$50 million is shared, not an allowance for this loan. If the business already has other EFS borrowing, the headroom available here is correspondingly smaller.
Borrowers remain responsible for repaying 100% of the loan, and participating financial institutions carry out their own assessment. These are scheme parameters, not an indication of what any business will receive. Recheck them before applying.
| Question | Cash purchase | Financing |
|---|---|---|
| Immediate liquidity | Falls by purchase and setup cost | Partly preserved, subject to deposit and fees |
| Financing cost | None, but the cash loses its other possible uses | Interest, fees and possible security exposure |
| Ongoing obligation | No lender repayment | Fixed contractual payments |
| Main risk | Insufficient operating reserve | Debt outlives the value, or the benefit arrives late |
Choose only after comparing total cost, liquidity, working life, downside affordability, security exposure and the alternatives. The outputs you want are a decision to quantify further, compare offers, stage the purchase, wait, or get professional advice.
Figures verified on 3 August 2026. Scheme parameters, rates and lender requirements change — check the primary source before relying on any figure.
Fundwise is an intermediary, not a lender. This is general information, not individual financial, legal, tax, accounting or credit advice. Financial institutions run their own eligibility and credit assessments and set all terms — we cannot guarantee approval, rate, amount or timing.
Read more about equipment and machinery financing, or get in touch to talk through your situation.
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