Having a business loan serves as the lifeblood of a business, providing the necessary funds to start, operate, expand, and innovate. It helps small businesses navigate challenges, seize opportunities, and achieve long-term sustainability and success.
However, some SMEs might find it difficult to secure business loans from traditional banks due to the lack of credit information, as well as the companies’ perceived riskiness. Additionally, it might get confusing to some business owners when it comes to comparing certain terms, such as the business loan interest rate, in the loan agreement. Here, we have a comparison guide to all the best SME and startup business loans available in Singapore to ease your troubles.
Traditional Bank Business Loan and Interest Rate
Traditional banks tend to put their applicants through a much more meticulous and longer assessment process to see if they are suitable to receive a business loan. Consequently, for those who don’t have a long-standing and good relationship with a traditional bank, obtaining any small business loans becomes challenging. Here are a few banks’ business loan and interest rates in Singapore to consider:
1. DBS SME Banking
- SME Business Loan from $20,000 to S$500,000
- DBS Quick Finance up to S$300,000
- Business Loan Interest rate up to 11%
- Flexible repayment period of 1 to 5 years
- Require 2 years financial statements
2. UOB Business Banking
- UOB Business Loan (BizMoney) up to S$350,000
- Business Loan Interest rate up to 10.88%
- Registered and operating for more than 1 year
- Up to 5 years repayment period
3. OCBC Business Banking
- Business Term Loan up to S$700,000
- Business Loan Interest rate up to 8.75%
- Repayment period of 2 to 5 years
- Startup Business Loan up to $100,000
- Business Loan Interest rate up to 9.75%
- Repayment period of 1 to 4 years
Digital Wholesale Bank Business Loan and Interest Rate
Digital banks in Singapore refer to banks that primarily operate online and offer their services through digital platforms, mobile apps, and internet banking. These banks often do not have physical branches, allowing them to offer more streamlined and cost-effective services.
Explore business loan options and interest rates offered by the following digital banks:
1. ANEXT
- ANEXT Business Loan up to S$300,000
- No documents required for business loans S$30,000 and below
- Up to 6 months repayment period
- Business Loan Interest rate from 6.8%
2. Green Link Digital Bank
- GLDB Term Loan from S$300,000
- Micro Term Loans from S$10,000 to S$300,000
- Repayment period up to 2 years
- Business Loan Interest rate from 5.00%
Government-Backed Business and Corporate Loan
The government offers a range of business grants and financing options under the Enterprise Financing Scheme (EFS) from Enterprise Singapore. At any growth stage, companies can take up these SME business loans to develop new products, expand their operations, and build on their capabilities.
One such financing option is the SME Working Capital Loan. Moreover, the government incurs a co-risk share of the borrowing amount. This makes lending less risky, and increases the chances of approval. Overall, these business grants support the growth and success of small businesses in Singapore.
- Maximum Loan Quantum of S$300,000 per borrower
- From 1 October 2022 to 31 March 2024: S$500,000 per borrower
- Maximum Repayment Period of 5 years
- 30% local equity held
- Group annual sales turnover not exceeding S$100 million or maximum of 200 employees
Private Lenders
Private lenders such as Poss Capital provide business loans for various reasons as they see fit for their investment. This is because they profit off the business loan interest rates of the money they lend you – that is their business model. At Poss Capital, we understand that small and medium-sized enterprises (SMEs) face major challenges due to limited access to finance across different stages of a business cycle. Poss wants to bridge this financing gap for businesses that lack sufficient funding by providing them with an alternative source of capital.
- Up to S$100,000
- Up to 12 months Repayment Period
- Business Loan Interest rate from 1.2% per month
- Monthly Repayment
Getting a much-needed SME business loan from a private lender can be much more flexible than getting it from a traditional bank. Lending from private lenders can provide you or your business with a much smoother path. Contact us today, and let’s help you get there faster. At Poss, we are here to provide you access to funds when you need them the most.
Hi, this is Priscillia SME broker. May I know how to apply business loan for my client?