A Beginner’s Guide On How To Find The Best SME Loan Singapore
Small and medium enterprises are among the most vulnerable sectors in Singapore, with most still facing repercussions due to the pandemic. Whether it’s dealing with temporary shutdowns, not having enough cash reserves, reduced work hours, or mass layoffs, the SME sector has gone through so many challenges.
In the same way, aspiring SME business owners also need to get past many hurdles to make their dream come to life.
What should entrepreneurs in Singapore do to start a business, keep an existing business afloat, or expand their reach and operations? The solution lies in the best SME loans for small businesses.
Here at OMY Singapore, you will discover the following:
Types Of Business Loans In Singapore
To help you find the SME loans that fit your situation best, here’s our SME Loan in Singapore guide.

1. Government-Assisted Business Loan Schemes
In 2020, different government-assisted business loan schemes were introduced as a way for the government to keep supporting businesses that were affected by COVID-19. These loans are administered by Enterprise Singapore, as well as participating financial institutions.
This type of SME loan is extremely beneficial for entrepreneurs because it includes a government risk share of up to a staggering 90%. Enterprise Singapore offers 3 various credit facilities for SMEs.
More From OMY: SMEs able to expand ventures through Scale-up SG Programme
EFS-WCL (SME Working Capital Loans)
Maximum loan quantum |
|
Maximum repayment period |
|
ESG risk-share |
|
Interest rate |
|
Eligibility:
- Must be a business entity that is registered and physically present in Singapore
- Must have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
- Must have Group Annual Sales Turnover of not more than S$500 million
*For “SME Working Capital”, the definition refers to businesses with a group revenue of up to S$100 million or maximum employment of 200 employees For more information, visit this page.
ETS-TL (Enhanced EFS – Trade Loan)
Maximum loan quantum |
|
Maximum repayment period |
|
ESG risk-share |
|
Interest rate |
|
Eligibility:
- Must be a business entity that is registered and physically present in Singapore, and
- Must have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership, and
- Must have a Group Annual Sales Turnover of not more than S$500 million
For more information, visit this page.
TBLP (Temporary Bridging Loan Programme)
Maximum loan quantum |
|
Maximum repayment period |
|
ESG risk-share |
|
Interest rate |
|
Eligibility:
- Must be a business entity that is registered and physically present in Singapore
- Must have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
2. Business Loans From Banks
All major banks in the country offer this type of SME loan to local businesses, but entrepreneurs may be asked to present certain requirements to prove the legitimacy of their business.
But how is a business loan different from a personal loan? Take a look at the table below.
Personal loan | Business loan | |
---|---|---|
Loan amount | Lesser | Larger |
Loan terms | Up to 7 years | Up to 5 years |
Documents required | Personal salary records | Financial reports, ACRA records, and many more |
Business age requirement | Minimum 6 months to 2 years | n/a |
Processing days | Less than a week | Up to 2 weeks or more depending on bank |
Personal loans are a great choice for people who are just starting their business. Despite the smaller loan amount (usually only 6x your salary), it is easier to acquire.
Want to know the best business loans offered by banks in Singapore? Take a look at this table below.
Loan | interest | tenure | Maximum loan | Eligibility |
---|---|---|---|---|
DBS Business Loan | To be assessed by the bank | 1-5 years | Up to S$500,000 or depending on the bank’s assessment |
|
OCBC Business First Loan | To be assessed by the bank | Up to 4 years | S$100,000 |
|
UOB BizMoney Loan | 10.88% per annum | Up to 5 years | Up to S$350,000 |
|
Maybank Business term loan | To be assessed by the bank | Up to 5 years | Up to S$500,000 (for working capital) |
|
Standard Chartered Business Instalment Loan | Up to 11% per annum | 3 years | Up to S$300,000 |
|
3. Business Loans From Finance Institutions
Many financial institutions also offer lending options to SMEs. These business loans are unsecured similar to banks. The only difference is that loans from financial institutions usually focus more on equipment loans, factoring, and other asset-based lending options.

Fastest Online SME Loans
Need an instant loan for your business today? You may consider applying from Capitall Pte Ltd. If your application meets all eligibility and credit risk criteria, your application approval can only take hours.
Also, when all the documents required and all information are submitted properly, you can receive your loan within 24 hours of application.
Apply for an SME loan in Singapore. Also, they provide auto financing.
More Best Business Loans
Take a look at some of the best business loans offered by financial institutions below.
Hong Leong Finance Fixed Assets loan | Singapura Finance Inventory Loan | Sing Investments and Finance Machinery Loan | |
---|---|---|---|
Financing percentage | Up to 90% | Up to 80% of purchase price or valuation | Up to 90% |
Interest rate | Fixed interest rate | n/a | Fixed repayment terms |
Tenure | Up to 7 years | Up to 180 days | Up to 5 years |
Best for | Purchase of new equipment, machinery, and other fixed assets | Purchase of new and used motorcar and commercial vehicles | Purchase of new or used machines |
Eligibility |
|
|
n/a |
Other loans to consider:
- Sing Investments & Finance Limited Commercial Property Loan
- Sing Investments & Finance Limited Accounts Receivables/Invoice Factoring Loan
- Sing Investments & Finance Limited COVID-19 Financial Assistance
- Singapura Finance Commercial & Industrial Property Financing
- Singapura Finance Business Loan
- Bugis Credit Business Loan
P2P Crowdfunding
Whether your business has been operating for a few years and you need funds for expansion, or you simply need capital to start your dream business, you can take advantage of crowdfunding.
For lending-based crowdfunding, individuals lend you money and you commit to repay the loan at a predetermined interest rate and period.
Here are some of the best crowdfunding platforms you can take advantage of in Singapore.
Crowdfunding Platform | Highlights |
---|---|
Funding Societies |
|
Kapital Boost |
|
Minterest |
|
FundedHere |
|
4. Merchant Cash Advance
This is a type of financing option that F&B businesses that use credit card terminals can take advantage of. The major criteria for this kind of credit facility include the SME’s credit card transactions for the past 6 months. Other factors include profitability, financials, and guarantors.
When it comes to this type of loan, the advance amount is calculated by averaging the monthly credit card transaction over the last 6 months. Then, it is multiplied 1.5-4 times. The repayment period for this type of loan is usually 6-9 months.
Here are some merchant cash advance providers in Singapore.
Merchant Cash Advance | Highlights |
---|---|
Monetium Leasing merchant Cash Advance |
|
Grab Merchant Cash Advance |
|
Majesty Funding Merchant Cash Advance Consolidation & Refinance |
|
Discover more about merchant cash advance.
5. Invoice Financing
For this type of loan, invoices are used as collateral. To qualify for this loan, the customers of a business must show financial strength.
When it comes to SMEs, they usually issue invoices after completing a sale. SMEs use invoices as collateral while they await payment for the sale. Once approved, they can collect up to 80% of the invoice value for each invoice until they reach their credit limit.
To get approved for invoice financing, the borrower must provide a clean track record of their past transaction history and service performance. Businesses whose customers are multinational corporations or the government are preferred compared to usual SME customers.
Here are some invoice financing providers in Singapore.
Invoice Financing | Highlights |
---|---|
Validus Invocing Financing |
|
OCBC Invoice Financing |
|
Invoice Interchange |
|
6. Business Overdraft
This loan is usually used as an alternative to business term loans. It is recommended for businesses who need short-term working capital. Despite being used for the same purpose as an unsecured business loan, an OD facility provides SMEs with a line of credit instead of the lump sum amount they need. Considering this, the interest is only charged for the amount used up by the SME.
To be eligible for this loan, an SME’s financial performance and bank statement records need to be evaluated. The personal credit records of the guarantors will also be considered.
These two banks provide business overdraft in Singapore.
Bank | Highlights |
---|---|
DBS Revolving Credit Line |
|
CIMB Overdraft |
|
7. Business First Loan
This type of unsecured loan is geared towards startups that have been operating in the country for 6 months to 2 years.
Just like other unsecured loans, this loan doesn’t put heavy emphasis on financial history and performance because the business has only been operating for a limited time. The major factor in the evaluation process is the company’s directors or guarantor’s personal credit scores, as well as their declared incomes.
Take a look at this table to learn more about OCBC’s Business First Loan.
Loan type | Highlights |
---|---|
OCBC Business First Loan |
|
8. Venture Debt Financing
Banks are unable to grant debt financing to unprofitable companies but recently, many startups have obtained multi-million venture investments while still not churning profits. Venture debt financing facilities were created to address these gaps.
To be granted this financing option, the financial institution will evaluate a company based on its equity obtained from venture investors, as well as its business model. There is less emphasis on the financial performance and history since startups are not profitable.
Take a look at this table below to learn about DBS and OCBC Venture Debt Financing.
Venture debt financing | Highlights |
---|---|
DBS Venture Debt Financing |
|
OCBC SME Venture Loan |
|
Frequently Asked Questions About SME Loan
Here are some commonly asked questions about SME loans.
What is the definition of SMEs?
SMEs are companies with a group annual revenue of less than S$100 million. These companies also have less than 200 employees and have a minimum of 30% shareholdings by Singaporeans and Singapore PRs.
What are the different government financing schemes in Singapore?
The different government financing schemes in Singapore are EFS-WCL (SME Working Capital), ETS-TL (Enhanced EFS – Trade Loan), and TBLP (Temporary Bridging Loan Programme).
What are the documents needed to apply for an SME loan?
When applying for a loan, you need to present documents that prove your positive track record. This includes:
· At least latest 2 years of financial statements and reports
· GST declaration
· 6 months' bank statements
· Proof of your company's ownership (like ACRA records)
· Director’s NOA
· Account receivables & payable ageing list
· List of existing banking facilities
The documents needed for loans for startups are different. This usually focuses on personal income documents.
What is the interest rate for SME loans?
This depends on various factors such as whether it is a secured or unsecured loan, or what the credit risk grade of the borrower is.
How long does a business loan get processed?
Business loans usually take 2 weeks to process since there is a lot of paperwork that needs to be examined and verified.
Can I qualify for a loan to start a business?
You may be able to qualify for a loan from a P2P lending/crowdfunding platform. However, businesses need to be registered or in operation for at least 6 months to qualify for other SME loans.
If you need urgent cash to start a business, try applying for a personal loan instead.
What can SME loans be used for?
SME loans can be used for a variety of reasons such as refinancing existing debt, expansion, purchasing new properties or inventory, and many more.
What is a government guaranteed loan?
This refers to a loan where the government assumes the debt obligation if the borrower defaults.
More From OMY: Best Online Brokerages In Singapore