Best Business Loans in Singapore:
The Ultimate Guide

If you want to see the best business loans in one place, then you’ll LOVE this (updated) guide.

The best part?

We’re going to show you some CRAZY strategies to help you get your small business loan approved that are working GREAT right now (in 2019).

So, we assume that YOU are here because you need business financing…

…Well, you are in the right place then.

In short, if you want to get a bank loan FAST, you’ll love this guide.

Let’s get started.

What is a Business Loan in Singapore?

Logically, I think that we all know what a business loan is…

…But for the sake of definitions:

A business loan refers to a sum of money that a company borrows, to utilize for purposes related to the business. Funds are disbursed to the business entity, where the loan will be repaid with interest over a period of time.

Business loans in Singapore are usually offered by the banks and many other financial institutions.

The good news for you:

There are many different types of business loans, like unsecured bank loans, equipment and machinery loans, working capital loans, micro loans, and various other asset-backed financing products…

…Which also means more avenues of financing, and more chances for you to qualify for a loan.

Each bank and financial institution will offer different types of SME loans with different interest rates and requirements to qualify.

However, you don’t have to go through the hassle of digging for all the information.

Simply click on the “Get Started” button to get a FREE assessment, and we will help to get the best business loan for you!

Types of Business Loans

Business Term Loan

Term loans are unsecured bank loans offered by the banks and financial institutions. It can be obtained from banks like DBS, OCBC, Maybank, Bank of China Singapore, UOB and many other lending institutions.

  • Loan Amount: Up to S$500,000
  • Repayment Period: 1 – 5 years
  • Interest Rate: 7 – 12% per annum
  • Processing Time: 2 weeks
SME Business Loans in Singapore

SME Working Capital Loan

The SME Working Capital Loan is a financing initiative by Enterprise Singapore to help small and medium enterprises in Singapore gain greater access to unsecured SME bank loans.

While most banks in Singapore have participated in the SME financing scheme, certain banks like the Bank of China Singapore (BOC Singapore) have not. They prefer to remain focused on providing corporate term loans to more established businesses.

  • Loan Amount: Up to S$300,000
  • Repayment Period: 1 – 5 years
  • Interest Rate: 3.2 – 4.5% per annum
  • Processing Time: 2 weeks
SME Loan Singapore

SME Micro Loan

The purpose of the SME Micro Loan is to help SMEs in Singapore get easier access to small business loans in Singapore.

  • Loan Amount: Up to S$100,000
  • Repayment Period: 1 – 5 years
  • Interest Rate: 3.2 – 4.5% per annum
  • Processing Time: 2 weeks
start up business loan Singapore

Startup Business Loan

The Start Up Business Loan is mainly for medical doctors and dental surgeons who want to set up a new private practice.

  • Loan Amount: Up to S$500,000
  • Repayment Period: 1 – 5 years
  • Interest Rate: 4.98 – 6.88% per annum
  • Processing Time: 2 weeks
equipment financing Singapore

Equipment Financing

Equipment financing allows you to receive funds to purchase equipment upfront. You then repay the amount via monthly installments over a period of time. Similar to a property loan, an equipment loan is also an asset-backed loan.

  • Loan Amount: Up to 100% of equipment value
  • Repayment Period: 1 – 5 years
  • Interest Rate: 1.8 – 2.5% per annum
  • Processing Time: 2 weeks
sme loan consultant


Crowdfunding is a good alternative to bank loans that allow you to raise capital via a pool of individuals.

  • Loan Amount: Up to S$5 million
  • Repayment Period: 12 – 36 months
  • Interest Rate: 12 – 16% per annum
  • Processing Time: 3 weeks
sme financing

Marine Offshore Engineering Loan

The Marine Offshore Engineering loan is a bridging loan aimed at assisting companies in the industry with working capital to ease cash flow problems.

  • Loan Amount: Up to S$15 million
  • Repayment Period: 1 – 5 years
  • Interest Rate: 6.75 – 8.25% per annum
  • Processing Time: 3 weeks

Find the Best Start Up Funding

How to Qualify For a Small Business Loan

Among the many factors and conditions that impact your eligibility to qualify for a corporate bank loan, there are THREE major factors to pay closer attention to.

Each of these factors can potentially overshadow all else and cause the outright rejection of your bank loan application.

  1. What is your credit score?
  2. How long has your company been registered and operating in Singapore?
  3. What is the annual revenue of your business?

1. How your credit score affects your loan application

In Singapore, it is mandatory for company directors to provide personal guarantee for all unsecured corporate loans. As you can guess, that would mean that your personal credit score will be a very important part of your small business financing application. Your personal credit score will have a heavy influence in getting the best SME loans for you.

While institutional lenders look at the financial strength of your company to determine the loan amount, they look at the personal credit history of the small business owner to determine their chances of getting repayments.

The better your credit rating, the higher your chances of getting a better company loan.

Before you apply for any company loan, you can obtain your own credit report to check your credit rating. Your credit report can be purchased for S$6 from This way, you get to see exactly what the banks and financial institutions will be looking at.

What is a good credit score to get an SME loan?
Generally, you will need to have a credit rating of AA, BB or CC. The credit rating system in Singapore allocates a grade to individuals in the range of AA – HH, with AA being the best grade.

If your credit score happens to be below the CC grade, do not be dismayed. Often times, institutional lenders will either request for an additional guarantor to the loan, or collateral to secure the loan.

How to analyze your credit bureau report

What to do after getting your credit bureau report?

The first thing to do is to check for mistakes and errors.

There may be errors on your credit report that could possibly affect your credit score. Be sure to check for the following:

  • Personal credit lines that you have never opened
  • Outstanding debts that do not belong to you
  • Payments for a credit facility that you have never used
  • Debts that you have repaid but are still reflected on the report

Before you attempt to rectify anything, first verify that the information is actually erroneous.

If the mistake has to do with a debt that you have already repaid, then you should contact the lending institution and ask them to inform the credit bureau that you have already satisfied the debt. Or, if the error has to do with an outstanding debt that does not belong to you, be sure to ask the related financial institution to rectify the issue and to update the credit bureau.

As a last resort, you could also contact the credit bureau directly, where they will be obligated to investigate the matter. Once the matter has been resolved, you can purchase your credit report again to check if the errors have been rectified and updated in your report.

However, if you do not find any errors and happen to have a poor credit score, identify the areas that you can improve on and work towards achieving a better credit score.

2. How long has your business been in operating?

One of the most important criteria to qualify for business loans is the duration that your business has been operating for.

Why is this important?

From the perspective of a lending institution, the longer that a business has been operating, the more stable the business is. As you know it, starting a business can be risky. A study done by the National University of Singapore on ‘startups in Singapore’, shows that 56.8% of startups are either struggling or simply not generating employment and growth.

The reality is that many new businesses do not survive past their first year. As such, it is not surprising that most lenders are hesitant to work with a new businesses that might not even survive long enough to repay back their small business loans.

Generally, most banks and financial institutions deem a business as reasonably “stable” when it has been in operations for at least 2 years.

Businesses that have been operating in Singapore for at least 2 years will have access to a greater variety of SME loans that offer larger loan amounts at very low interest rates.

However, it does not mean that there are no available SME financing options for new business owners. There are many government grants and government assisted SME financing schemes for businesses that have been operating for less than 2 years.

3. What is the annual revenue of your business?

Another key criteria to qualify bank loans is the annual revenue of your business.

Generally, banks prefer companies that show an annual revenue of S$300,000 and above. They use the annual revenue of a business as a factor for determining the loan amount that you will qualify for.

Logically, a lender will not offer an SME loan with monthly installments that are larger than your monthly cash flow. In fact, banks will only offer a loan amount that they are sure you can repay.

Determine How Much You Need

So the saying goes, “If you fail to plan, you plan to fail.”

When going for SME business financing, always be precise. Identify the amount of additional capital that you really need, then design a clear and actionable plan on how to use the funds most effectively. Time is of the essence as you will be paying an interest on your SME bank loan.

Before applying for a small business loan, you should ask yourself the following THREE questions:

  1. What do you need a small business loan for?
  2. How much should you be applying for?
  3. Can you afford to pay the monthly installments?

1. Why do you need a corporate bank loan?

Before getting a small business loan, you should assess the financial situation of your business to determine if you really need the additional funds. Do you need a long-term loan or a short-term loan? Determine what you need the financing for.

With a myriad of SME loans in the market, you should consider carefully in order to obtain the best SME loan for your business.

Need working capital for daily operations? An SME Working Capital Loan could help. Need to finance unpaid invoices? Invoice financing could be best business financing solution for your business.

Here are some common reasons to get an SME loan:

  • To fund a start up
  • To finance the cost daily operations
  • To purchase inventory
  • To expand your business

Getting the wrong type of business financing can have very adverse effects on the finances of your business. For instance, if you chose a short-term loan for a long-term project, it can cause your business to run into unnecessary cash flow problems.

It is important that you consider the objectives for getting a business bank loan, and to match the time-span of your project with the term of the loan.

Determine exactly why you need the additional working capital, then start looking for the best corporate loans to meet that need.

2. How much should you borrow?

Once you have decided to get a small business loan, then comes the part where you decide on a monthly installment amount that you are confident of repaying.

Based on the desired SME loan interest rate and quantum, divide the total sum by the number of months in the tenure to see if it is a sum that your cash flow can comfortably sustain.

Understanding the monthly commitments that your business has taken on is a good step to take in working out the financial position of your company.

Having a clear goal of how much funding you require will help in the process of obtaining the corporate bank loans you need.

3. Can you afford to repay the monthly installments?

Lenders like to lend money to businesses that have money to pay them back. To assess a business’s ability to pay back a business loan , lenders rely on various factors that articulate the financial strength of a business, such as the debt to equity ratio, financial statements that show revenues and expenses, and cash flow projections.

To ensure that you are sufficiently equipped, it would be wise to tabulate the total loan amount required and the interest rates, in order to know whether your business can sustain the monthly repayments comfortably.

How to Apply for a Business Loan Singapore

  1. Prepare all the documents needed to apply
  2. Collate loan offers from all the bankers

1. What are the financial documents needed to apply?

Required documents for assessments may vary from lender to lender. However, these are the few general documents that every financier will almost certainly need to process an application:

  • Past bank account statements
  • Profit and Loss statements
  • Balance sheets
  • Income tax returns of Directors
  • Identification proof of Directors
  • Information on existing debt facilities

We all know that paperwork can cause delays. Therefore, even though all the relevant documents will be requested for during the application, it would help to speed up the process significantly if all the proper documents were already ready.

An important part of the application process is to convince the lender that your business is ready to take on the loan, and that your business is also strong enough to repay it. Having all the relevant documents prepared will help to portray this. More often than not, there will also often be requests for additional documentation. As far as possible, always try to be prompt in providing them.

It is also important to note that for a company to be eligible for business loans in Singapore, there is a requirement for the company to have at least 30% local shareholding. Most banks will request for the Director or a shareholder in the company to provide personal guarantee for the term loan, where the guarantor must be either a Singapore citizen or Singapore PR.

2. How long is the SME Loan application process?

The usual loan application takes about 2 – 3 weeks to get processed to the point of disbursement. However, with more complex cases, the processing time could take up to 1 month.

If you happen to need financing urgently, you could always engage a loan broker. Loan brokers are often able to get applications processed faster, due to the fact that they are familiar with the bankers, requirements and documentation.

Bank Loan Interest Rates

  1. Effective Interest Formula
  2. Simple Interest Formula
  3. Compound Interest Formula

When on the topic of corporate bank loan interest rates, it is good to have a basic understanding of the various types of interest rates. It is also important to know the interest rate formula and how to calculate the cost of your loan.

1. Effective Interest Formula

Effective interest rate is the true cost of a loan over a given period.

It is calculated through a simple formula: r = (1 + i/n)^n – 1

effective interest formula

2. Compound Interest Formula

Compound interest is interest that is added onto the principal sum such that the principal balance continues to grow at an increasing rate.

The formula for compound interest, including principal sum, is:
A = P (1 + r/n) (nt)

  • P – initial principal amount
  • r – annual interest rate
  • t – time factor
  • n – number of compounding periods
compound interest formula

3. Simple Interest Formula

Simple interest rate is the simplest method of calculating the interest of a loan.

Simple interest formula:

simple interest = principal x interest rate x time period 

About Us

Capable Loans is ranked #1 for the keywords “Business Loans” and “Business Loan Singapore”. As a corporate financing consultancy, it is a bonus if our clients are able to find us easily when they Google for our services.

#1 ranked on Googl;e

At Capable Loans, we believe in the power of leveraging on Google’s search results to create more visibility and awareness of our business and services.

We are happy to share a glossary of our Google search results with you. We are ranked #1 on Google for the following search terms:

#1 for “Business Loans”
#1 for “Business Loan Singapore”
#1 for “SME Business Loan”
#1 for “Business Financing Singapore”
#1 for “Company Loan Singapore”
#1 for “Corporate Loan Singapore”
#1 for “Bank Loan Interest Rate”
#1 for “Business Term Loan Singapore”
#1 for “OCBC Business Loan”
#1 for “Small Business Loans”
#1 for “SME Loan Singapore”
#1 for “SME Loans”
#1 for “bank of China Singapore”
#1 for “compound interest formula”
#1 for “simple interest formula”
#1 for “boc Singapore”

FAQ on Business Loan Singapore

7 Effective Tips to Qualfiy for a Small Bank Loan

With so many business financing options in the market, where do you get started?

Which is the best SME loan product for your business, and how do you qualify for it?

Here are seven steps to help you qualify for an SME loan:

  1. Maintain a minimum average balance of S$10,000 in your company bank account.
  2. Hit a yearly turnover of S$200,000 and above.
  3. Increase your company’s net profit from the previous year.
  4. Reduce outstanding corporate and personal loan exposure.
  5. Build a good personal credit rating.
  6. Provide collateral.
  7. Include an additional guarantor for the loan.

Business loan interest rates in Singapore tend to vary slightly from bank to bank. The typical bank loan interest rate of an SME loan under the Enterprise Singapore SPRING financing scheme ranges from between 3.2% – 4.5% p.a.

However, the interest rate of an in-house unsecured business term loan will range from between 7% – 12% p.a.

An in-house bank loan is a corporate loan that is offered solely by a bank. It is NOT associated with the Enterprise Singapore SPRING financing scheme.

If application with the banks fail, there are other alternative lenders like Minterest or Funding Societies who may be able to help. Interest rates will be slightly higher than the local banks, between 12- 18% per year.

Finally, you have arrived to this stage. Kudos on the concerted effort and hard work that you have put into getting this far. By now, you should have received offers for the best bank loans in the market. It is now time to compare loans and decide on the bank loan offer that you want to take up.

Just a few questions to ask yourself before you make this decision:

  • Can I repay the monthly installments?
  • Is this the best offer available with the lowest interest rate?
  • Am I aware of all the application and processing fees?

If you have answered a confident “YES” to all the above questions, then go get that SME loan Singapore.