Small Medium Enterprises are like the backbone of Singapore’s business industry as it contributes around 50% to the GDP. Unfortunately, due to the ongoing COVID-19 pandemic, a lot of SMEs are struggling.

Thankfully, the Singapore government introduced different financial assistance schemes to help SMEs. The right SME business loan can help owners pay for business bills, rental, supplies, and more.

Why Do You Need A Business Loan?

Needless to say, an SME loan Singapore can go a long way for people who would love to set their own business. It provides the freedom to influence the market locally as well as globally while creating a personal brand value.

SMEs are one of the growing and influential industries in Singapore. Their financial prospects are attractive as well as competitive.

So you can start an SME according to the market’s demand. And Singapore business loans will help you to initiate it. With a sorted business plan, you can approach the money lending organizations that will lend you money by analyzing the realistic prospectus of your business plan. So, you can turn your dream into reality to become the face of this SME business world.

Apart from the initial investment, you can also approach the organizations for further development of your existing SMEs as they have various suitable plans as per the requirement of the concerns. From purchasing new machinery to the renovation of your old warehouse, the right business financing scheme will help you tide over financial challenges for further business growth.

Types Of Business Loans In Singapore

There are multiple financing options in Singapore. Since these loans are offered by different banks and institutions, it will be easy for you to apply for them if you know the basic loan terms. Here are the overviews of some of the fundamental facts for a business loan in Singapore.

1. Standard Business Loan

This is an unsecured loan so you don’t have to offer your assets as collateral. Typically, standard business loans have a maximum loan repayment period of up to 5 years. The interest rate charged will depend on the bank or financial institution.

Major banks, such as DBS, OCBC, and UOB, offer different types of SME loans. However, SMEs need to fit their eligibility requirements, like the number of years the business is in operation and how much revenue it makes.

2. SME Working Capital Loan

The business loans in Singapore scheme launched by the government in 2016 and the Solidarity Budget 2020 has empowered every business to get the government’s assistance to avail of the working capital loan (WCL) up to S$300,000.

According to the need and eligibility of the cash flow of the business, SMEs can apply for this SME loan for the enhancement of their working capital, and they have to pay the hundred percent of the loan amount within five years.

3. Temporary Bridging Loan

Aside from SME Working Capital Loans, the government also launched the Temporary Bridging Loan there. The scheme allows each business entity to get access to the business loan up to a loan amount of $3 million, considering the recent pandemic effects on the economy. The loan amount is still up to offer by different financial institutions and financing facilities.

4. Start Up Business Loan

Also called “first business loan”, this is specifically meant for start up business that do not have a lot of business history yet. It is similar to a traditional business loan except it offers a smaller loan cap.

Some of the start up SME loans and grants in the country include:

  • SME Micro Loan
  • Startup Business Loan for Medical Professionals
  • OCBC First Business Loan
  • Early-Stage Venture Funding
  • Capability Development Grant

To qualify for a startup business loan, SMEs need to be in operation for a few months. Even businesses with no strong financial history may be qualified.

Best SME Loans in Singapore 2023

By now, you already have an idea of the different types of SME loans in Singapore. Here are some of the best SME loans available in Singapore.

Government-Funded Business Loans

Name of Loan Maximum Loan Amount Loan Tenure Interest and Fee
SME Working Capital S$300,000 Up to 5 years Per bank or FI assessment
Temporary Bridging Loan Programme S$3 million / borrower Up to 5 years Per bank or FI assessment

To support struggling small and medium enterprises amidst the COVID-19 pandemic, the Singapore government introduced government-assisted loan schemes in 2020.

Under Enterprise Singapore, along with participating financial institutions, SMEs can get the financing they need at lower interest rates. Additionally, this scheme also offers a government risk-share of up to 90%.

With the SME Working Capital, you can only borrow up to S$300,000 while the Temporary Bridging Loan Programme offers up to S$3 million per borrower.

Bank Loans

If for some reason you do not qualify for a government-assisted business financing, you can also consider taking a traditional business loan from banks.

Name of Loan Maximum Loan Amount Loan Tenure Interest and Fee
DBS Working Capital Business Loan S$500,000 Up to 5 years
  • 10.88% p.a.
OCBC SME Working Capital Loan S$300,000 Up to 5 years
  • 3.5% to 5% p.a. (EIR)
UOB Bizmoney Loan S$350,000 Up to 5 years
  • 10.88% p.a.
  • Facility rate: 2% of the approved loan quantum
  • S$500 per year annual fee
Maybank Business Term Loan S$500,000 Up to 5 years
  • 10.88% p.a.
  • Up to 2% of loan amount processing fee
Standard Chartered Business Installment Loan S$300,000 Up to 3 years
  • Up to 11% p.a.
  • Default fee of S$100

For instance, the DBS or OCBC Bank offers an unsecured loan up to $500K on an interest rate of 10.88% with a maximum tenure of five years. However, by charging the same interest rate with a maximum tenure of 5 years, UOB can offer you an unsecured loan of up to $350K.

Loans from Online Moneylenders

Aside from government-assisted financing schemes and traditional bank loans, you can also consider taking a loan from licensed moneylenders.

Traditional bank loans can take a few days to several weeks to be approved. On top of that, they have strict eligibility requirements. That said, some SMEs may have trouble getting approved. If that is the case, a licensed moneylender may be of assistance.

Loan Amount Up to S$200,000
Interest Rate 5-15%
Loan Tenure Up to 24 months; subject to the terms and conditions of the agreement
Processing Fee No processing fee
Late Fee Depends upon the loan agreement
Eligibility Requirements
  • At least 21 years old
  • Minimum turnover of $60,000
  • Business must be operating for at least 1 year

With a licensed moneylender, you can borrow up to S$200,000 with a maximum loan repayment of up to 24 months. Licensed moneylenders charge an interest rate between 5% and 15%.

Best Equity Financing

Equity financing involves raising funds by selling shares of your business to third-party investors. This means exchanging an ownership interest in a business for capital.

There are two common types of equity financing:

1. FundedHere

FundedHere is a crowdfunding platform in Singapore that offers equity financing. Here are some of its features:

Feature Equity
Funding Amount S$100,000 – S$1,000,000
Eligible Companies Early-stage startups
Fees 6% in cash and 2% in equity

Eligibility Criteria:

  • The business must be incorporated for at least 3 months.
  • Must be operating in Singapore
  • Have at least one Singaporean founder
  • Have at least S$50,000 in contribution capital

FundedHere has a minimum operational history requirement of only 3 months. That said, it is attractive to early-stage startups. With this option, SMEs can raise as much as S$1 million in 35 days. However, it has a highly selective application process with a 10% acceptance rate.

With this crowdfunding platform, SMEs have the option to upsize or accept more than their original funding goal. Additionally, FundedHere also lets SMEs withdraw funds even when they don’t meet the said goal.

2. Fundnel

Fundnel is another crowdfunding platform that is attractive for startups that need financing. This platform is known for its large investor network of over 7,000. Plus, they have a strong track record of completed deals – $100 million+.

Just like FundedHere, Fundnel has a stringent financing process. It has a 10% acceptance rate and only 3% of applicants receive funding.

So what makes it an attractive financing option? It’s great for SMEs looking for larger equity financing since it is uncapped. That said, larger and mature SMEs may benefit more from Fundnel. However, this platform charges a small fee of 5%.


  • Receive long-term funding from 3rd-party investors
  • No ongoing interest rate
  • Increase the number of shareholders in exchange for working capital
  • Issue voting or information rights to all investors
  • Shares usually carry an entitlement to dividends if and when declared.

Successful Business Loan After Meeting Loan Eligibility and Requirements

Eligibility And Requirements For SME Loans

The information regarding the SME business loan Singapore will guide you to approach the right finance sector regarding your business nature and requirement. However, your business should be eligible to get a loan. And the supporting documents should reflect the current and preceding financial status, including the cash flow and the credit score of the business.

Here are the basic criteria for an SME business loan in Singapore:

  • The business should be incorporated and registered in Singapore. Additionally, it must be operating in Singapore. Supportive documents are essential to provide the identity proof of the owners, partners, and directors of the business.
  • 30% or above of the shareholders in the SME must be Singaporeans.
  • The minimum annual turnover of the SME should be $300K.
  • It should maintain at least a $10K balance in its bank account. The bank or the loan provider also needs the latest bank statements for at least six months.
  • The SME should have an operating history of a minimum of two years.

SMEs may also be required to provide financial statements and NOA of those two years to help the financial institution to analyze the financial strength of the business to remit a loan.

What documents do you need when applying for a business loan?

  • All directors and partners NRIC
  • Most recent information report (Business Profile) from the Accounting & Corporate Regulatory Authority
  • Most recent Income tax assessment notice (both personal and from the company)
  • Most recent financial statement
  • Most recent invoices or business contracts
  • Most recent utility bills under the company name
  • Most recent 6-month bank statements
  • List of assets owned by the company, directors & partners (if any)
  • Office / Shop Tenancy Agreement (if any)

Different banks and financial institutions may have different requirements. It’s best to inquire or visit their website before sending your application. In doing so, your business loan application will be processed faster.

Range Of Interest Rate For SME Loans In Singapore

Each enterprise financing scheme in Singapore has different interest rates. It will depend on the bank or financing institution where you apply for a business loan. Remember, there are different factors that may affect interest rates, such as your business’ credit history.

That said, here is the range of interest rates for the most common SME loans in Singapore:

Loan Type Interest Rate (EIR)
Unsecured Business Term Loan 9% – 12% p.a.
Temporary Bridging Loan 2.75% – 5% p.a.
Working Capital Loan 3.75% – 6% p.a.

Quick Tips For Comparing SME Loans

  1. Choose a loan that matches your business’ needs. Before choosing a business loan, you must first determine how much you need and what you need it for. For example, you can consider a micro-loan if you want to meet short-term obligations.
  2. Compare interest rates, maximum loan years, and fees. It’s advisable to first consider government-assisted loan schemes before anything else. For instance, whether you choose a WC loan or a temporary bridging loan, you’ll only be charged an interest rate between 2.75% p.a. and 6% p.a. Additionally, there’s a higher chance of getting approved due to the government risk-sharing feature.
  3. When do you need the funds? Traditional business loans may take a few days before it gets approved. If you need urgent cash, you may want to consider alternative loan options like a licensed moneylender. With a licensed moneylender, cash can be disbursed within a day.

Ultimately, it’s best to choose a business financing scheme with the lowest total cost to your business. This means choosing a loan with lower interest rates, low fees, and a realistic repayment schedule.

Alternative Financing Options For Businesses

Apart from the traditional banks and money lenders, there are various other loan options to get the funds you need for your SME. Credit lines and personal loans are noteworthy among them. They are like the saviors to the sinking boat in the ocean, and they help the SMEs when other options do not work with their circumstances. Let me elaborate on them for your convenience.

1. Credit Line

The credit line is also known as the Lines of Credit (LOC). Well, it is none other than a finance payment instrument that a borrower can use and encash whenever he or she wants.

Think of it like a credit card for SMEs. Just like a credit card, it allows SMEs to borrow a pre-approved sum of capital anytime. Interest will be charged when you borrow an amount from the account.

You can either use a secured LOC or an unsecured LOC, but the second option comes with a higher rate of interest. It is the borrower’s choice and compatibility with the bank that decides whether he or she can use a revolving or a non-revolving LOC.

The borrower is allowed to keep borrowing and repaying the money with both revolving and non-revolving LOC. But when the full payment of the loan is given, the non-revolving LOC account will be closed forever.

2. Personal Loan

Apart from the credit line, a personal loan is another option that can save the borrower during a crisis. A sudden cash crunch in the business does not always get a loan approved to handle the situation. However, being the proprietor or the partner of an SME, you can individually apply for the best personal loan rates. For the eligibility of a personal loan, you must have a decent income statement. Because that assures the bank or the financing authority about the timely remittance of the loan.

3. Invoice Factoring

Another alternative is invoice factoring. This type of financing involves trading your outstanding invoices for cash.

This means you’ll be selling unpaid invoices to a third-party company. In doing so, you’ll be able to get 90% of the value of your invoice. The third-party company will then collect payment from your customers.

So what’s the catch? While invoice factoring is a good option to get fast cash, you’ll have to give up a percentage of your revenue upfront.


Key Takeaways:

  • The Singapore government introduced government-assisted loan schemes in 2020.
  • Under the SME Working Capital, you can only borrow up to S$300,000 while the Temporary Bridging Loan Programme offers up to S$3 million per borrower.
  • SMEs can also consider taking unsecured loans from banks. Interest rates range between 9% and 12% p.a.

Check and compare different enterprise financing packages online and seek the approval of the financial authority that you and your business can afford. Not qualified for government-backed financial schemes and traditional bank loans? Consider seeking the assistance of a licensed moneylender.

Licensed moneylenders, like Fortune Credit, are more approachable as their eligibility criteria are simple and hassle-free. Your current financial statement of steady and decent earning is enough to get you a personal loan or business loan.

Fortune Credit Pte. Ltd. can approve a loan for the SME that is just one year old and has an annual turnover of $60K. A low interest rate and quick approval will make your business operations smooth and swift.