As interest rates in Singapore show signs of easing, both consumers and small businesses are rethinking their financial strategies. In this TNGlobal Q&A, Bryan Tay, Singapore Country Manager at Lendela, a fintech platform dedicated to matching borrowers with personalized loan offers, shares insights into navigating this evolving lending landscape. Lendela’s platform simplifies the process of finding competitive loan rates through a single application while protecting borrowers’ credit scores. For consumers and SMEs alike, this service provides a valuable tool for making informed borrowing decisions.

In the interview, Tay shares his insights on how borrowers can capitalize on potential rate cuts, refinance existing loans, and secure more favorable financing terms. He explains the importance of transparency in lending, how SMEs can avoid common pitfalls, and the role fintech platforms like Lendela play in leveling the playing field for small businesses and consumers.

Tay also delves into the strategies that SMEs should consider as they prepare for future economic uncertainties, offering practical advice on cash flow management, leveraging digitalization, and understanding the true cost of borrowing. His recommendations provide a roadmap for navigating the complexities of the current lending environment while ensuring long-term financial resilience.

A former Olympian and multi-Gold medal national athlete turned serial entrepreneur, Tay brings over a decade of experience across business development and management, sales strategy, customer success, and operations to Lendela’s executive leadership.

Prior to Lendela, Bryan co-founded Boom Singapore, one of the country’s most popular holistic fitness brands in recent history, where he led the rapid expansion of the brand, achieved as much as 200 percent YoY revenue growth, and expanded the business across Southeast Asia.

What advice do you have for consumers and SMEs looking to position themselves for potential rate cuts? How should they approach refinancing or new loan opportunities during this period?

Borrowers and SMEs in Singapore now face a lending environment that increasingly looks like rates will gradually fall, and where money might become “cheaper” again. This may present an opportunity for some to reassess their financial positions.

For SMEs, this means exploring refinancing options or new loan products with more favorable interest rates and terms. This can be a lifeline to better manage cash flow and operating costs, but it also calls into question their ability to assess these options in an informed manner.

For example, we often find that many small business owners don’t have a clear view of all their financing options and end up settling for suboptimal loans, costing them thousands more in borrowing costs.

Lower rates could lead to a rush to refinance but also increased competition in the lending space. Could you elaborate on how borrowers might navigate this competitive environment, and how information asymmetry could affect their decision-making?

Lower rates are likely to increase competition in lending, with many businesses rushing to refinance or boost liquidity. It might seem like a great time to borrow, but hidden fees or less favorable terms can quickly erase those savings.

SMEs especially need to think carefully about the full cost of a new loan and how it fits into their long-term financial picture.

Unfortunately, the lack of transparency in the industry still makes it tough for smaller businesses to access all their options or gather enough info to make informed decisions.

With smaller loan sizes and lackluster demand due to the previous higher-for-longer environment, how are SMEs currently adapting to the falling rates? What strategies should they consider to strengthen their long-term position as rates potentially fall further?

Some SMEs in Singapore will naturally adjust to the post-rate cut environment by strengthening their cash flow and easing financial strains from the pandemic and recent economic uncertainty. Many might consider refinancing high-interest debts to benefit from lower rates, but there needs to be a degree of caution.

Even with rate cuts, businesses could still face risk without solid financial management. One key thing we advise is not to borrow more just because it’s cheaper now, but instead, to find loans that truly fit your business needs and long-term goals.

It’s also vital for business owners to evaluate refinancing options strategically, ensuring they align with both short- and long-term plans.

To improve borrowing potential, SMEs should work on building strong financial records, paying off debts on time, and having a solid, long-term business strategy.

Rate cuts may present opportunities for SMEs to invest in innovation and digitalization. How can businesses evaluate the risks and benefits of making these investments during a time of economic uncertainty?

With lower rates, SMEs have an opportunity to reallocate savings from reduced loan repayments into other areas of their business, and many will no doubt be looking at digitalization or product innovation.

The immediate benefits of investing in digitalization or product/service/process innovation—like improving operational efficiency, automating processes, or enhancing customer experiences—may position businesses for growth, but in times of economic uncertainty, cash flow management should also be high-priority.

From conversations with our customers, there are key questions to answer before thinking about investing in an uncertain economic environment — Will this investment enhance your ability to remain competitive or generate sustainable revenue streams? Is the upfront cost manageable, and does it come with a clear long-term return on investment?

Additionally, we think it’s important to maintain a degree of financial flexibility. If an SME is considering using a loan to fund these investments, it’s crucial to seek out all your personalized options and compare their terms. The right loan, structured with favorable repayment terms and transparent conditions, can make all the difference in managing both risk and reward.

How can SMEs leverage further potential rate cuts to secure additional liquidity? What role does cash flow management play in ensuring business resilience, and how should businesses prepare for unexpected economic changes?

In a low-rate environment coupled with an uncertain economic outlook, it’s crucial to maintain a strong cash flow and put yourself in a position to mitigate financial risks.

SMEs that lack a developed finance function should look into developing solid budgeting and forecasting strategies while keeping an eye on potential macroeconomic shifts that could affect their operations or finances.

The lending industry has been criticized for its opacity. How has this lack of transparency historically affected both consumers and SMEs? What improvements in transparency could lead to more informed financial decisions?

Historically, the lack of transparency in the lending industry has meant that many SMEs and consumers have been unable to secure the most suitable loans for their unique needs. This is especially problematic during periods of economic volatility or when borrowing costs are heightened.

For SMEs in particular, the challenge is often compounded by a lack of understanding about the types of financing they need or qualify for. Many business owners who come to us are unaware of the full scope of financing options available to them, and they may end up choosing products that don’t fully meet their needs.

Many business owners also apply for the wrong type of loan or facility, which can lead to rejected applications and missed opportunities. This issue is exacerbated by the fact that many SMEs, especially newer businesses, lack the necessary financial documentation and credit history to meet the requirements of most lenders.

For consumers, the situation is no different. Many borrowers sign loan agreements without fully understanding how the interest rates affect their long-term financial plans or what additional charges they may face, potentially leading to unexpected costs and financial strain down the line.

Transparency is not just about clear communication; it’s about fostering trust. The more open and honest lenders are with their customers, the more confident and empowered those customers will feel in managing their finances.

How do you see digital lending platforms and fintech innovations helping to improve transparency in the industry? Are there any technologies that Lendela is implementing to provide more accessible, safer, and quicker financing options?

There’s an opportunity to introduce more transparency to the borrowing experience amid increased demand and in an industry that can sometimes appear somewhat opaque to the consumer.

Are these the best rates available to me? How should I interpret this information on my screen? What does comparing loans from different loan providers do to my credit score?

There are often many question marks on the side of the consumer, and we believe fintechs like Lendela are uniquely positioned to address them, by presenting information in an accessible and transparent manner, by always being straight with the customer about their options and what they’re getting, with excellent, always-on customer support, and through financial education.

As the market for lending grows more competitive, how can consumers and SMEs differentiate between lenders? What key factors should they consider when evaluating loan offers to avoid pitfalls?

With more rate cuts anticipated, competition in the lending space is expected to intensify, often overwhelming borrowers with information that may lead to less informed decisions.

SMEs should consider more than just interest rates—factors like the total loan cost, fees, repayment flexibility, and the lender’s reputation for transparency and service are crucial. Understanding the true cost of a loan ensures that it won’t negatively impact cash flow in the long run. Flexibility in repayment terms is also key during economic uncertainty.

While quick loan approvals are appealing, they shouldn’t come at the cost of fully understanding the terms. Borrowers should prioritize service and support, ensuring their lender remains responsive after approval.

This is where loan matching and the reverse auction model become especially useful to borrowers and businesses, because they won’t have to deal with the information asymmetry or pitfalls but will still be able to access the most competitive rates and terms tailored to their specific needs.

Beyond the immediate impact of potential rate cuts, what long-term trends should borrowers—both individuals and SMEs—be aware of in the lending space? How can they future-proof their financial strategies?

This is a great question that doesn’t get asked enough. There are several long-term trends in the lending space that both borrowers and SMEs should be mindful of.

The first is the growing digitization of financial services like lending. Digital lending platforms and fintech solutions are reshaping the way people access credit, Lendela being one of them. Apart from driving increased efficiency, it’s also raising the bar for customer experience.

Lenders that can provide seamless, tech-enabled processes, such as instant approvals and digital loan disbursements, will continue to lead the market.

Additionally, borrowers are expecting more personalized financial products. For both individuals and SMEs, the ability to access loans that are tailored to their specific needs, rather than generic advertised rates and terms, is changing the game.

Alternative lending options, such as non-bank lenders, are becoming a more popular option, especially for SMEs that may not meet traditional banks’ criteria. These lenders often offer more flexible terms and faster approval processes, which could become a dominant trend in the coming years.

Borrowers need to stay open to non-traditional sources of financing and be aware of the advantages they can offer, particularly in terms of flexibility and speed. Ultimately, an ideal financing option is one that complements your long-term business objectives and broad financial strategy — it’s as simple as that.

No one can truly future-proof anything, let alone their finances,  but borrowers might want to focus on improving their creditworthiness in lull periods by maintaining a healthy cash flow, reducing debt where possible, and ensuring they have a clear understanding of their borrowing options.

Regularly accessing and evaluating your personalized loan options is going to be very valuable in ensuring you get the best possible terms as the market evolves.

How is Lendela helping SMEs navigate these turbulent times? Are there specific programs, products, or resources that Lendela offers to support small businesses in managing financing and growth opportunities?

Lendela offers SMEs access to a wider range of financing options than what they’d find on their own, leveraging our advanced matching engine to do the legwork of gathering their personalized options.

This way, they have the power to choose from a variety of their most accurate (personalized) options and find the best terms for their business, often translating into tens of thousands of dollars in interest savings and greater stability in the long run.

This is possible because of the unique reverse auction model that we run, which matches borrowers with lenders at scale.

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