Your SME Guide to Best Business Loan in Singapore

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.

Basic General Requirements

There are some basic requirements to apply for a SME business loan and other Singapore government financing under the Enterprise Financing Scheme.

Ownership or local shareholding: Minimum 30% local shareholding held directly or indirectly by Singaporean(s) and/or Singapore PR(s)
Incorporation of a SME: Business should be registered and operating in Singapore
Annual sales/income: Depending on where you’re lending from, government-backed loans have a limit of $100 million annual sales generated. Some financial institutions require a minimum annual income of $20,000 or higher.
Employment size: Group employment size differs when seeking funds from different financial institutions. For certain lenders, this is a non-issue.
Operating duration: Your business should be operating for at least 6 months.

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 Working Capital Loan

30% local shareholding
Annual group sales below S$100 million OR group employment size less than 200
Loan quantum from S$20,000 to S$500,000
Loan tenure up to 5 years
Indicative Interest Rate starts from 7.5%
Processing fee of 0.75% for online applications

2. OCBC Business Term Loan

Locally incorporated for at least 2 years
30% local shareholding
Loan quantum of up to S$700,000
Loan tenure up to 5 years
Indicative Interest Rate starts from 7%
Facility fee of 1.5% of the approved loan amount (min. $500)

Note: OCBC launched a Women Entrepreneurs Programme in March 2024 which will waive processing fees on loans of up to S$100,000 towards start-ups that are less than 2 years old and founded by women.

3. UOB Business Loan

Registered and operating in Singapore for at least 1 year
30% local shareholding
Annual group sales below S$100 million OR group employment size less than 200
Loan quantum up to S$350,000
Loan tenure up to 5 years
Indicative Interest Rate from 7.75%

4. CIMB BizGrow

Loan quantum up to S$400,000
Loan tenure up to 5 years
Indicative Interest Rate up to 9.88%

5. Standard Chartered Working Capital Loan

Loan quantum up to S$500,000 per borrower OR S$5 million per borrower group
Loan tenure from 1 year to 5 years
Indicative interest rate from 9% p.a.
Annual fee maximum 2% of approved loan amount (min $400), subsequent years $100 per year; additional interest at 3.5% p.a. above the interest rate levied on all overdue instalments

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 Business Loan

Loan quantum from S$5000 to S$300,000
Loan tenure from 1 year to 5 years
Indicative interest rate from 6.8%
One-time facility fee of 1% approved loan amount or S$200 (whichever higher); S$100 late fee and default interest (3x of your loan interest rate) charged on principal portion of overdue amount

2. GreenLink Digital Bank Micro Term Loan

Loan quantum from S$10,000 to S$300,000
Loan tenure up to 2 years
Indicative interest rate from 5% p.a.
Facility fee of 1% of credit limit granted; late fee of S$50 for every overdue instalment

3. Maribank Business Loan

Business must be operating for at least 6 months
25% local shareholding
Loan quantum up to S$200,000
Loan tenure up to 12 months
Simple interest rate at 0.5% per month, effective interest rate is dependent on loan quantum/tenure
No processing or facility fees; late payments will incur 15% late interest charge

SME and Startup Business Loan in Singapore

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

Non-Bank Alternative SME 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.