sme bridging loan singapore

SME Bridging Loan (Singapore): Does Your Business Need One?

Most Singaporean business owners are overly confident in their start-ups and feel they don’t need a SME bridging loan. They rely on their savings and the money they gain from their venture to keep their business running.

But what’s next when the funding runs out? You could be forced to shut down the enterprise you worked so hard to establish. Worse still, you’ll miss out on lucrative opportunities once your company is no longer functional.

Applying for an SME loan is still a good idea even if your business is thriving. The loan amount helps you stay prepared even when the market isn’t performing well, as it ensures you receive a consistent supply of funding. 

What is SME Bridging Loan?

Also referred to as simply bridging loan, interim financing, and SME working capital loan, an SME bridging loan is a short-term loan given to responsible and eligible business owners. It helps them enjoy consistent cash flow in their company.

This loan is usually taken out for a duration of 2 weeks to three years as the borrower waits for the arrangement of longer-term financing.

Company owners use the loan amount for various purposes such as:

  • The purchase of new machinery or software to help the business generate more money.
  • Paying off operating costs and staff salaries that are due.
  • Purchasing required inventory.


Inflation and SMEs in Singapore

Prices are expected to rise in any developing and stable economy. This affects many countries, including Singapore, which has one of the strongest economies globally.

SMEs in the country suffer in the face of inflation. One of the most common effects of inflation is increased labour costs. The increase in price makes it challenging for SMEs to improve or maintain profit margin.

Fortunately, the government took a step to remedy the situation. It’s extending loan assistance programmes for SMEs for six months (from 1st April 2022 to 30 September 2022) to keep the cash flow going when inflation hits hard. 

One of the notable business loan assistance programmes that’s leaving a positive impact is the Temporary Bridging Loan Programme (TBLP).

Group of young coworkers discussing project together

Temporary Bridging Loan Programme (TBLP)

A Temporary Bridging Loan Programme (not to be confused with the Enhanced Enterprise Financing Scheme) is one of the business loan options the Singapore government introduced in the Solidarity Budget 2020. 

You have to be a business entity physically present and registered in Singapore with approximately thirty percent of equity held by Permanent Residents or Singaporeans living in Singapore to be eligible for the business loan.

The programme was intended to help SMEs manage their immediate cash flow needs when COVID-19 was wreaking havoc on the economy. It’s available to all sectors.

Its latest extension to 30 September 2022 brings some impressive characteristics to the table, including that qualified business owners can borrow a loan amount of up to S$1 million and enjoy a repayment duration of five years. Additionally, the business loan programme has an interest rate capped at 5.5%.

The government takes part in seventy percent risk sharing of the loans. This is to motivate participating financial institutions to give TBLPs, cater to the unrecovered amount, and keep the interest rates low. 

It might be a commendable move, but it doesn’t change much if you’re a business owner, as you’re still responsible to pay the full loan amount and interest payments.

The risk-share only applies when you’re unable to clear the credit for whatever reason.

Temporary Bridging Loan Programme

Until 31st March 2022

Until 30 September 2022

Maximum Loan (revised)



Maximum Loan Tenure

Five years

Five years

Government Risk Share



Interest Rate Cap (revised)




Reasons To Get a TBLP Even If Your Business Is Stable At The Moment

Here are some wonderful reasons you should be among the business owners rushing for a Temporary Bridging Loan application despite how much your company is flourishing now:

1. Grow Your Creditworthiness

It might sound absurd to get a TBLP loan when your company is doing well and generating plenty of cash. You may not know it, but you’re building a good reputation for yourself with financial institutions when you take the loan and repay it on time.

The financial institutions will see you’re creditworthy and won’t hesitate to give you a loan whenever you need it. What’s more, they’ll offer you credit with a lower effective interest rate and better terms.

2. Temporary Bridging Loan Is Very Low-Cost

Temporary Bridging Loans have an interest rate capped at 5.5%. And it only gets better because you can score an even lower interest rate if you have a track record of repaying your loan amount on time.

You can borrow a maximum amount of S$1 million if you’re eligible with-get this- no collateral and a five-year maximum repayment period. That’s enough to help you grow your company with zero frustration. And since the government is risk sharing, you stand a chance to enjoy cheap financing.

3. Take Advantage Of Business Opportunity

The loan amount can help your company grow and expand more in the market. You’re spoilt for choice in terms of opportunities with consistent cash flow with a low interest rate in hand. Whether you’d like to buy software or equipment or hire more employees, you can do so with ease.

You won’t have to use the money to improve your company if it’s already enjoying a stable cash flow. You could use the loan amount to open new branches of your business in other parts of the country or world.

4. Scheme Is Ending Soon

It’s a shame that this sweet offer with a low interest rate is only available for a few more weeks. That’s more reason to maximise it while it lasts. 

Although the maximum loan quantum has been lowered from S$5,000,000 to S$1 million, the current September 2022 extension has plenty of exciting offers for eligible SMEs. Don’t wait anymore. Apply for the temporary loan and enjoy fast approval!

business team discussing on chart

How Quickly Can A Company Get The Temporary Bridging Loan?

You’ll get instant status approval when you apply for the loan. Minimum documentation is necessary, and you can apply online using your Corppass or Singpass. 

A knowledgeable representative on the platform is always on standby to help you with the application process and notify you of any additional documents you should have, so you’re in good hands.

Where To Get Bridging Loan for Your Business

There are two places you can receive business loans with a low interest rate for your business: Banks and licensed moneylenders. Let’s look at the two options in detail:

1. Banks

It’s no surprise that business banking comes in at number one considering its offerings. Most Singaporean SME owners choose financial institutions due to their enticing deals, like the teaser interest rate it offers to potential customers for the first few months.

Additionally, different financial institutions provide bridging loans with a lower interest rate. The interest rates get lower if you repay your loans on time and are a consistent client. 

The rate is subjected to the banks’ loan and risk assessment. Plus, the banks require personal guarantee and follow their standard commercial recovery procedure.

The comparison table below shows the top 5 different financial institutions providing bridging loans with an unbeatable interest rate.

Interest Rate

Monthly Instalment Total Interest Processing Fee

Penalty Fee

Maybank Temporary Bridging Loan

5% S$1,887 S$13,227 1.5-2%


OCBC Temporary Bridging Loan

5% S$1,887 S$13,227 1-2%


ORIX Leasing Temporary Bridging Loan

5% S$1,887 S$13,227 1-2%


SINGAPURA Finance Temporary Bridging Loan

5% S$1,887 S$13,227 1-2%


DBS Temporary Bridging Loan

4.75% S$1,876 S$12,541 1-1.5%



How To Apply

The application process is fast and simple:

  • Apply with Singpass
  • Customise your repayment period and loan amount
  • Receive your approval status on the spot
  • Receive your loan in your business account

Eligibility and Requirements

  • At least 30% shareholding by Singaporeans or Permanent Residents
  • Your agency must be registered and operating in Singapore
  • You must be at last 18 years old
  • Your enterprise must meet the credit criteria
  • Latest Personal Income Tax Of Notice Assessment of guarantor(s)/directors/sole proprietors/partners/owners
  • Last two years’ certified financial statements or audited accounts
  • Copy of NRIC (front and back) of guarantor(s)/directors/sole proprietors/partners/owners
  • Last six months’ bank statements

2. Licensed Moneylenders

Licensed moneylenders are gaining recognition fast among Singaporean business owners due to their unique approach to bridging credit. Some of the reasons you should borrow a bridging loan from a licensed moneylender are:

  • Their loans are unsecured- they won’t rely on your property as collateral.
  • They abide by the 4% interest cap put in place by the Ministry of Law in Singapore.
  • You won’t require a credit score when borrowing the loan from them.

Key Features

  • Minimum income- S$1500 for Singaporean citizens and Permanent Residents, S$2,000 for foreigners
  • Loan Amount- Up to 6x your monthly income; up S$200,000
  • Interest rate- 1-4%
  • Repayment- Up to a month or until the property’s completion date
  • Processing fee- Not exceeding 10 percent of the principal loan amount when the credit is granted (one time only)
  • Late fee- Maximum of S$60 every month of late repayment

How to apply

  • Apply online on your preferred moneylender’s website or contact them via phone.
  • Fill out the presented online form or answer all their queries.
  • Submit the necessary files to the moneylender’s submission channel.
  • Apply for the loan.
  • Await an email from the moneylender or a call from them asking you to pick up your credit.

Eligibility and Requirements

  • You must be at least 18 years old
  • You must be a foreigner or a Singaporean, or a Permanent Resident living in Singapore
  • You must be earning S$1,500 if you’re a Permanent Resident or Singaporean and S$2,000 if you’re a foreigner
  • You must have exercised the Option To Purchase (OTP)
  • Copy of the OTP
  • NRIC
  • Proof of residence
  • Proof of income and employment
  • SingPass to log in to CPF, IRAS, and HDB websites

Other Financial Options for Business in Singapore

Not too keen on a bridging loan as a boost for your business? No sweat. Here are some other alternatives that work just as fine:

1. Government-Assisted SME Business Loans

These can range from fixed assets investments to working capital loans. You must approach the participating financial institutions to get these loans. 

The banks may need a borrower to present a personal guarantee on loans disbursed. You must have physical operations in Singapore, and your business must be registered there for you to be eligible for the loans.

2. SME Capital Working Loan

The SME Capital Working Loan is part of the Enterprise Financing Scheme (EFS). It was launched in 2016 and was introduced to help organisations access cash.

Enterprise Singapore partners with participating financial institutions to bear up to seventy percent of credit risk if a company defaults on the loan. Your business must be registered and physically present in Singapore and have at least 30% local shareholding to be eligible.

3. Green Loans- Sustainable Financing For SMEs

A green loan is a financing scheme that allows borrowers to use the proceeds to fund projects. These projects make a substantial contribution to an environmental objective.

You stand to gain immensely from using this loan. Not only will you attract investors, partners, and consumers, but your business will have a positive image of caring about the environment.

4. Commercial Property Loan

Also referred to as business property loans, commercial property loans are loans that finance the purchase of a commercial property. Most Singaporean banks offer a loan tenure of 25-30 years for commercial property loans.

It can work for you if you’re a borrower purchasing a property for your business. Or if you’re an investor buying land so you can sell it later at a higher price.

5. SME Fixed Asset Loans

These are Enterprise Singapore schemes to make financing available to all locally-owned SMEs. You can apply them in financing commercial cars and constructing equipment. 

You can also use them to upgrade and automate factory facilities or buy HDB and JTC properties.

6. Short-Term Financing (Trade Financing)

Short-term financing is an Enterprise Singapore scheme loan that can help SMEs to boost working capital in the short term or get funding for sales and purchases.

You can also use them to shield your business if you’re working with overseas suppliers and clients, where trading documentation like an LC (Letter-Of-Credit) is usually necessary.

Final Word

An SME bridging loan is an effective and convenient way to ensure your business loan is operational and gains access to consistent working capital despite the economic climate. You can also apply for a bridging loan to acquire your second property.

Key Takeaways

  • An SME bridging loan ensures your company receives a consistent supply of funding.
  • The revised Temporary Bridging Loan Programme allows you to borrow up to S$1 million and has a capped 5.5% interest rate.
  • Every participating bank requires a personal guarantee before you can get a loan. They’re also obligated to follow their standard commercial recovery procedure.
  • The Singaporean government participates in a seventy percent risk share to keep TBLPs’ interest rates low.
  • Licensed moneylenders adhere to the 4% interest rate cap put in place by the Ministry of Law in Singapore, putting them a step ahead of any bank.

Need a bridging loan but don’t have the time, energy, and patience to check hundreds of moneylenders in Singapore? Instant Loan can help. It has a quality algorithm that allows you to save time locating the most suitable licensed moneylender for your needs. Contact us today, and get three loan quotes from us, free of charge!

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