Singapore-based New Union, which provides debt-based business finance – connecting local businesses with accredited and institutional investors – has successfully raised S$500,000 for hospitality company Song Fa Bak Kut Teh through its crowdfunding platform in early May.
New Union, which was established in 2013, claims in a press release to have facilitated over S$37 million worth of funds for SMEs in Singapore and S$875 million in Asia.
Song Fa Bak Kut Teh plans to use the funding for expanding outlets both locally and overseas. Speaking on the development, Eddie Lee, Group CEO of New Union, explained: “We are pleased that our platform is able to support Song Fa’s aspiration and their management shares similar ideals on how technology can build better business.”
This transaction makes Song Fa among the early adopters raising funds through crowdfinance platforms, with its maturation seeing more firms starting to join the bandwagon.
Recently, the Monetary Authority of Singapore (MAS) released news that crowdfunding platform operators would require a Capital Markets Services (CMS) license.
Lee observed this as a positive development, noting that it would provide “a clear framework for platform operators to follow”, sharing that New Union was in the process of applying fora CMS license to improve its position to support fundraising operations of Singapore-based small and medium enterprises (SMEs).
Commenting on the investment, Yeo Hart Pong, the second generation family business owner as well as the managing director of Song Fa Bak Kut Teh, stated: “The funding will also enable us to leverage on technology to upgrade our supply chain IT all the way from procurement to point of sales. This will upgrade our productivity and build the business to optimal efficiency.”
Many of the campaigns listed on New Union are seeking working capital or funds for business expansion, with tenors of six months to a year and interest rates ranging from 7.5 per cent to 9 per cent. By comparison, other debt crowdfunding platforms in Singapore competing with New Union such as MoolahSense, Capital Match and Funding Societies promise investor returns that can range up to 25 per cent.