How to Get a Business Loan in Singapore

How to Get a Business Loan in Singapore: a Step-by-step Guide (2022)

At the beginning of the Covid-19 outbreak, many SME businesses in Singapore could not keep their doors open for more than a few weeks. Many businesses saw their revenue and profits fall substantially due to a lack of customers. 

As the pandemic progressed, even more businesses were forced to shut down their doors permanently as stricter quarantine guidelines were imposed. This, in turn, led to an economic downturn. By the end of 2020, Singapore’s GDP fell by 5.8%.

It was evident that SMEs needed business financing to regain their footing. Since the past year, small-to-medium-enterprise loans have been introduced by the Government to assist, and banks remain a reliable source of funding for businesses. 

How to Get a Business Loan in 5 Steps

In order for your business to get the financing it needs, it’s important to follow these steps:

  1. Look into your different business loan options
  2. Maintain accurate business records
  3. Keep a good credit score
  4. Assess your ability to make repayments for the loan
  5. Prepare all of the required paperwork before application

Step 1. Look into your business loan options

Before you make a business loan application, make sure you understand all the details, including the potential risks and costs. That way, you’ll know which of the best SME loans suits your needs.

Normally, there’s the issue of approval. Different business loans have different eligibility requirements, and you may need to provide extra documentation and information to demonstrate that you meet the criteria. For example, a personal guarantee is required for all traditional business loans, while some other options do not require any collateral or personal guarantee.

Then, the interest rates and repayment terms will vary depending on the type of business loan it is – whether it’s secured or unsecured, a business term loan, or a revolving loan.

Different types of small business loans in Singapore

This article will discuss the different types of loans for small businesses and explain the conditions of each of these financing options.

Government-Assisted SME Business Loans in Singapore

Loan Maximum Loanable Amount Loan Tenure Interest Rate Government Risk Share
SME Working Capital Loan Up to $1M / borrower 5 years Subject to PFIs’ assessment of the risks involved. 50%-70% risk-sharing may be offered to early-stage companies.
Temporary Bridging Loan S$3 Million / borrower 5 years Capped at 5% p.a. 70%


1. SME Working Capital Loan

The SME Working Capital Loan was launched in June 2016 as a government-assisted financing scheme to help SMEs with their operational expenses and capital expenditure.

This business loan has maximum financing of up to $1M with a 5-year repayment period for SMEs in Singapore. Moreover, a 50%-70% risk-sharing agreement is part of the partnership between Enterprise Singapore and 17 other financial institutions supporting this scheme.

The credit criteria & interest rates for this scheme may differ between banks, but the eligibility requirements are:

  • Be a business entity that is physically present, registered, and operating in Singapore
  • At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
  • minimum annual turnover S$500 million
  • For “SME Working Capital”, the SME definition refers to Group revenue of up to S$100 million or maximum employment of 200 employees.

2. Temporary Bridging Loan

Introduced in the Solitary Budget 2020, the Temporary Bridging Loan Programme allows SMEs to access credit (up to $5M) with lower interest rates capped at 5% per annum. Additionally, this financing option has a Government risk-sharing of 70% with 19 participating financial institutions.

SMEs eligible to participate in the TBPL program can contact the various participating financial institutions to determine their interest rate. The eligibility requirements are:

  • Be a business entity that is registered and physically present in Singapore.
  • At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership

3. SPRING Micro Loan or Startup Business Loan

An SME Micro Loan is intended for small companies or start-ups seeking micro-finance up to $100K. This startup business loan can cover everyday operating costs and maintain cash flow with a 4-year repayment period for a new business. The SME Working Capital Loan has since taken its place.

Best Banks for SME Loans in Singapore

Government SME loans are a great option if you need business financing. However, businesses that need the cash quickly can also consider different banks and their financial products as alternative financing options.

Bank SME Loan Maximum Loan Amount Maximum Loan Tenure Interest Rate (Including EIR) Processing fee
DBS Business Loan S$500K 5 years 10.88% p.a. EIR 2% of the loan amount
OCBC Business First Loan S$500K 5 years 10.88% p.a. EIR 2% of the loan amount
UOB Bizmoney Loan S$350K 4 years 10.88% p.a. EIR 2% of the loan amount
UOB SME Loan S$550K 5 years 2.88% p.a. 2% of the loan amount
Maybank Business Term Loan S$500K 5 years 10.88% p.a 2% of the loan amount
Standard Chartered Business Instalment Loan S$300K 3 years 1.68% p.a. 2% of the loan amount


1. DBS Business Loan

Rated as one of the safest banks in Asia for 2020, DBS works with small businesses to access unsecured term loans. DBS Digital Bank Loans can finance up to S$200,000 with a repayment period of up to 5 years. Because this financing option is part of the Resilience Budget, you will only have to pay interest charges during the first 12 months of repayment of the loan.

To qualify, your business needs to be registered in Singapore and physically operated in the country, with at least 30% of the shares being locally owned. There is collateral required for this type of loan. 

2. OCBC Business First Loan

One of Singapore’s leading providers of SME financing, OCBC offers unsecured business term loans with competing interests. As a business owner, you may borrow from OCBC up to S$100,000 over a four-year period.

To get financing, you do not need documentation or collateral, but you must provide at least one Guarantor (in this case, someone who is a Singaporean or PR over 21 years old and earning at least S$30,000 a year). 

3. UOB Bizmoney Loan

Most SMEs opt for UOB Bizmoney Loan when looking for a business loan. This loan is a little higher in terms of capital, with the bank being able to finance as high as S$350,000. There is also a longer repayment period of 5 years, which is the maximum.

This loan has an effective interest rate of 10.88% per annum, with a 2% processing fee. Note that you will also need to shell out S$500 per year. Companies that have been in operation in Singapore for at least three years can apply for this loan.

4. UOB SME Loan

Up to S$550,000 can be borrowed through the UOB SME Loan over a five-year period. Businesses must be at least one year old, 30% locally owned, and have a minimum of 50% equity held by individuals to qualify. The business must also employ fewer than 200 people and have an annual turnover of less than S$100 million. 

5. Maybank Business Term Loan

A Maybank Business Term Loan may be the right fit if you’re seeking a larger business loan, capped at half a million. If you are eligible, you can disburse up to S$500,000 over five years and repay the loan within that time. Those who want to qualify must have a minimum turnover of S$300,000, 30% local ownership, and three years of business operations. 

6. Standard Chartered Business Instalment Loan

Standard Chartered offers Business Instalment Loans that you can take out for up to S$300,000 with terms of 1 to 3 years without pledging any collateral. A very competitive rate of 11% is currently available for this loan, but it may vary in the future. You must have been in business in Singapore for at least three years and make a minimum of S$750,000 in revenue per year to qualify for this program. Businesses must have at least 50% Singaporeans and permanent residents as shareholders.

Step 2: Maintain Accurate Business Records

When you’re applying for a loan, it’s imperative to keep and organize your business records. Banks will want to see all of your past transactions, including bank statements and records of payments, so it’s important to maintain accurate records and always prepare the documents required.

Most banks can deny your application for a business loan if you don’t have the requisite information on hand. Keeping the necessary business records will show your banker that you are a capable business owner who understands the importance of his business, and therefore has the potential to be a good credit risk.

It’s also important to research the documentation requirements beforehand. This way, you’ll know ahead of time exactly what information you need and won’t waste time scrambling when you’re already stressed out about filing for a business loan.

Your system should include receipts of all purchases made, including equipment or other assets your business has acquired, and copies of all bills received.

Step 3: Keep a Good Credit Score

A good credit score is one of the easiest ways to make it through the loan application process without difficulty. It can help speed up the process and, at times, even determine whether or not your application will be approved. A bad credit score may mean that you’ll have to wait much longer for your loan application than expected and be unable to fund that first wave of capital needed to start up your business in time.

Step 4: Assess Your Ability to Repay the Loan

Making sure you can repay the business loan before applying can help you streamline the loan application process. The easiest way to start is by understanding the basics of business loans and asking yourself the important questions. “How much money do I plan on borrowing?” and “What types of collateral can be used to secure your loan in case your business fails or becomes insolvent?”

If you’re already taking out a loan, weigh the interest rate on the types of loans you are considering, and compare them with your current debt load.

Step 5: Prepare All Your Paperwork Ahead of Time

It’s also important to research the documents required beforehand. This way, you’ll know ahead of time exactly what information you need and won’t waste time scrambling when you’re already stressed out about filing for a business loan.

Your system should include receipts of all purchases made, including equipment or other assets your business has acquired, and copies of all bills received.


FAQs: Business Loan for SMEs 

  • Who can qualify for a business loan?

Most banks consider business loan applications after borrowers have operated their business for a minimum of two to three years.

  • How can I get a first-time business loan? 

 As long as your company has been in business for a few months, you can get a first-time loan without a great financial history and as long as you meet the basic eligibility criteria.

  • How long is the business loan application time? 

Loan applications are often accepted online by financial institutions, so your business will have easy access to the funding it needs as quickly as 24 hours after you fill out an application.

  • Which SME Business Loan should I choose?

Ultimately, it’s up to your discretion. Different financing products from different banks and financial institutions will usually have their own pros and cons. Some will usually be specific to a need (like a fixed assets loan and equipment financing), and the best SME loan will be what suits your need more than others.

For borrowers in need of more help in making the right choice, Instant Loan provides a curated list of loan providers that can help them to weigh their choices.


The Bottom Line

  • Design your budget to allow for loan payments even before receiving the money
  • Check your credit history and know why it’s important
  • Search for business loans online that offer repayment options with promising interest rates as well as flexible terms.

The best SME business loans will be the ones that best address the financial needs of your small business. It’s important to research thoroughly to find the appropriate loan option for your company.

Instant Loan lets you skip the legwork and provides you with a tailored list of loan options that are perfect for your financing needs from the top financial institutions in Singapore, so you can jumpstart your small business today.

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