SME Working Capital Loan // SPRING Enterprise Singapore

SME Working Capital Loan to Grow Your Business

Under this SME financing scheme, Enterprise Singapore (formerly SPRING Singapore) partners with participating financial institutions to bear 50% of credit risk in the event that a company defaults on the SME loan.

To qualify for the SME Working Capital Loan, your company must be registered and operating in Singapore. Your company must have at least 30% local shareholding, an annual sales turnover of not more than S$100,000,000, and a company size of not more than 200 employees.

It allows businesses to get greater access to business loans of up to S$300,000. The government assisted financing scheme was launched in 2016  to help small medium enterprises to tide over dry periods with sufficient working capital to meet cash flow needs.

Loan Amount

Up to S$300,000

Loan Term

1 – 5 years

Interest rateR

3.2% – 4.5% p.a.


To qualify for the SME Working Capital Loan, your company must meet the following criteria:

  • Registered and operating in Singapore for at least 6 months
  • At least 30% local shareholding
  • Company turnover at least S$300,000; and no more than S$100 million
  • Total employment size not exceeding 200
SME Working Capital Loan Singapore

Required Documents for Application

To apply for the SME Working Capital Loan, here are the documents that you need to prepare:

  • NRIC or passport copy of company directors
  • Income tax Notice of Assessment of directors for the last 2 years
  • Company financial statements for the last 2 years
  • Bank statements for the last 6 months

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What is the SME Working Capital Loan?

Working capital refers to the cash that a business utilizes for daily operations, and the general running matters of the business. As the saying goes , “Cash flow is king”. What happens when a company does not have enough money to run its daily operations?

The working capital loan in Singapore is a business loan product that was launched by SPRING Enterprise Singapore, in conjunction with many participating banks and financial institutions.

SPRING Enterprise Singapore, through the Enterprise Financing Scheme (EFS), seeks to offer the SME loan to provide companies with additional funds for daily operations. Business owners usually take up SME working capital loans in challenging times, or when they want to expand the business.

How Does It Work?

Business loans in Singapore generally have repayment terms of up to 5 years. The main objective of the funds is to provide businesses with cash flow to sustain daily operations.

With a repayment period of up to 5 years, the SME working capital loan is ideal for long-term expansion plans that require time to be successfully executed. The Enterprise Financing Scheme was initiated to help companies ease daily operational costs for a prolonged period.

Given that all businesses are unique in needs and operational activities, the banks do not dictate how businesses use the working capital funds, allowing companies to use the funds freely for whatever purpose the business needs. Unlike an equipment loan where funds must be used for a specific purpose, this flexibility also provides for an easier and smoother application process.

More often than not, businesses that need additional financing are businesses that experience seasonality in their revenues. Companies utilize these working capital loans to tide over slower periods, allowing for business to continue as usual. Other businesses may use the funds to stock up before busy periods when revenues start to stream in, or even to jump on opportunities that allow for the business to expand and grow.

Why Should You Get this Business Loan?

The purpose of the SME working capital loan in Singapore is to help business owners to tide through periods of slower revenues. Ideally, the main idea would be to allow ample time for the borrower to roll the money into revenue generating projects, where there will be sufficient returns for the borrower to repay the monthly instalments.

As with firms in the construction business, or even a shop that sells durians, businesses that work on a project to project basis or rely on seasonal revenues, are bound to run into cash flow difficulties at some point. The objective of the SME loan is to ensure that business owners will have enough capital to continue business operations until business picks up again.

On the other hand, some business owners do not face cash flow problems. They take up the additional funds for the purpose of expanding their business.

This is a scenario where the SME working capital loan will serve a completely different purpose, and the SME owner could use the funds to seize a rare opportunity that could potentially propel his business into greater growth.

What is the Cost of the SME WCL?

Structured as a booster for companies in Singapore, the SME Working Capital Loan was designed by SPRING Singapore (now Enterprise Singapore) to offer a large quantum over a long term, at low interest rates.

Interest rates can vary from bank to bank, and from one financial institution to another. All the lenders will make their offers based on the financial strength and health of your business.

Among many other factors, lenders will look at the age of a business. The longer the business has been around, the more confidence they have in its ability to repay the loan.

Another thing that lenders look for are the valuable assets of a business, such as property or equipment. Generally, the more assets a business can put up as collateral, the more lenders are willing to lend to them, sometimes at significantly lower rates.

This is simply because with collateral, lenders are able to lower their risk exposure and will consider the borrower as low risk.

With this SME financing scheme, businesses usually borrow from between S$50,000 to the maximum S$300,000, depending on the spectrum of factors that lenders use to assess the credit worthiness of a company.

The repayment period will be between 3 to 5 years, depending on the cashflow of the business. The stronger your business, the longer the repayment period. Most lenders will also charge a small processing fee. So always be prudent to read through all the conditions of an offered loan to prevent being caught off your guard.

How To Qualify For The SME Loan?

These days it has become simple to obtain a business loan, by simply going online or by walking into any bank branch. There are so many online lending platforms, forums, and comparison websites that make it easy to get all the information you need.

However, before embarking on your noble quest for funding, be sure to determine exactly how much your business needs. Also, do some thorough calculations to understand how much time your business needs to repay the loans. This will help you to pick out the most suitable product for your business.

After doing an online application, the lender will send a representative to meet you in person, usually a young relationship manager. During the meeting, there will be a few bank consent forms to be signed, which gives consent for a lender to carry out relevant credit checks.

There will certainly be a request for more documents as well. The required documents will vary between banks. The relationship manager will collate all the documents and proceed to submit the case to the credit department for assessment.

Upon approval, the lender will present you with an offer letter that details the conditions of loan offer. It is imperative that you review the offer letter thoroughly, so that you are aware of every single clause and condition. If it does not work for you, you can always find another financier.

However, if the conditions of the loan offer are acceptable, you will be required to sign on the letter of offer to officially accept it. Loan disbursements will usually take place about 1 to 2 weeks after the acceptance of offer.

SME loans can do amazing things for a business. It can help you to jump onto an opportunity that could potentially propel your business to new heights, help to get a business through tough times, or expand the operations of the business.

Carry out the proper due diligence of researching what other lenders have to offer, so that you can choose the best and most suitable financial product for your business.

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