FREE Business Loan Calculator
To Calculate Interest Rates

FREE Business Loan Interest Rates Calculator

Our business loan calculator will help you to decide on how much you should get, by showing you how much your monthly installments will be.

At some point in time, most businesses will need to get access to additional capital. It could be for daily business operations, business expansion, or simply to improve cash flow. In most cases, business term loans are usually the choice of additional capital.

Be it a short-term loan from a crowdfunding platform, or a long-term SME loan like the SME Working Capital Loan and the SME Micro Loan , a business term loan would probably be your best financing option.

How much is the interest rate of your term loan? What is the monthly installment amount? Use our business loan calculator to get those numbers in just a few seconds!

What is Effective Interest Rate?

Also known as the Reducing Balance interest rate, the effective interest rate, or EIR, reflects the true cost of a business loan.

To be precise, the EIR reflects the actual cost of the business loan at the end of its tenure, and is usually amortized on a reducing balance basis.

The reducing balance method of amortizing loan payments has it that interest rates are reduced as the balance of the loan amount gets smaller with each payment. Essentially, it follows an inverted pyramid structure – where a larger portion of interest is.

Business Loan Calculator

How to Use the Loan Calculator?

“How much will my monthly repayments be?” The one most common question that almost every single borrower will ask. Look no further! Get those digits right here in a matter of seconds.

No matter the quantum or tenure of your new loan, our business loan calculator will tell you how much your monthly repayments are in just a matter of seconds. To get a good idea of how much you will be paying back monthly, simply key in the loan amount, term in years, and the proposed interest rate from the bank. In the following paragraphs, we will also be touching on how to understand the results.

Under ‘Monthly Instalment’, the figure that you see will be the monthly repayment amount that you will have to service on a monthly basis until the debt is cleared. Therefore, be sure to do some calculations and make sure that the monthly payments are sustainable before committing to a loan.

Moving on, you will also see ‘Total Interest Charged’, which is a figure that is dependent on the loan amount and total tenure offered. The total amount of interest can vary depending on both your interest rate and loan term. However, not to worry, this segment will share a little bit on how to save on interest rates.

In some cases, carrying out an early redemption or refinancing of a loan will help to lessen the total amount of interest paid. When a refinancing occurs, it is the simple process of a loan being transferred over to another bank, where you will most likely be offered lower interest rates.

business loan calculator

What Is The Difference Between a Secured Loan and an Unsecured Loan?

When talking about debt financing, there will always be two types of loans, namely the unsecured term loans, and the secured loans. A secured loan is basically a loan that is taken up in exchange for a valuable asset that the lender takes as collateral.

Collateral is a valuable asset that is used to provide security for a loan, so that the lender can seize it in the event of a default. By default, mortgage loans and car loans are by its own nature, a secured loan, because the loan is secured by the property or the vehicle.

On the other hand, unsecured loans are largely based on trust, that the borrower will pay his monthly instalments. However, if the borrower fails to make payments, the lender does not have any collateral that he can use to secure his risk exposure.

Essentially, this means that unsecured loans will always be much riskier than secured loans, which in turn, would also mean that the interest rates for unsecured loans will always be higher than secured loans.

FAQ on Business Loan Interest Rates Calculator

Type of Lender Average Interest Rate
Traditional Banks and Large Institutional Financiers
3.5% - 11% per annum
Alternative lenders
(P2P Crowdfunding platforms)
12% - 18% per annum

The average interest rate of a business loan in Singapore will vary depending on the risk profile of your company, the type of loan that you are applying for, and the bank or financial institution that you are working with.

Generally, the  average interest rates offered by the banks and large financial institutions will range between 3.5% to 11%, while the interest rates offered by alternative lenders, such as the P2P (peer-to-peer) crowdfunding platforms, will be around 12% to 18%.

It is important to note that the repayment period of a business loan from a bank will usually be between 1 to 5 years, while the loan tenure offered by an alternative lending platform will be significantly shorter, typically between 3 – 24 months.

While small business loans from a traditional bank might seem like the obvious better choice, take a closer look and you will realize that that might not always be the case.

For instance, when a business is in need of a substantial sum of capital, but only for a short-term project of 6 months – would you want to continue paying interest for 5 years? Or would you rather take up a short-term small business loan with an alternative lender?

For this question, we will assume the parameters of the term “best” to be based on three factors – maximum loan amount, interest rate, repayment period.

We will also use the effective interest rates (EIR) to reflect the cost of various the small business loans.

Not sure what effective interest rate (EIR) is? No problem. Scroll up to check out our explanation of the EIR in the middle section above.

Instead of listing all the banks in Singapore, we have decided to save your time by narrowing the list down to the 4 banks that we think are best for business loans.

1. DBS bank
  Maximum Loan Amount Interest Rate (EIR) Max. Loan Tenure
SME Working Capital Loan S$300,000 6.75% p.a. 5 years
SME Micro Loan S$100,000 6.75% p.a. 5 years
Business Term Loan S$500,000 10.88% p.a. 5 years
2. Maybank
  Maximum Loan Amount Interest Rate (EIR) Max. Loan Tenure
SME Working Capital Loan S$300,000 6.5% - 7.5% p.a. 5 years
SME Micro Loan S$100,000 6.5% - 7.5% p.a. 5 years
Business Term Loan S$500,000 10% - 13% p.a. 5 years
  Maximum Loan Amount Interest Rate (EIR) Max. Loan Tenure
SME Working Capital Loan S$300,000 6.5% - 7.5% p.a. 5 years
SME Micro Loan S$100,000 6.5% - 7.5% p.a. 5 years
Business Term Loan S$500,000 10% - 13% p.a. 5 years
4. UOB
  Maximum Loan Amount Interest Rate (EIR) Max. Loan Tenure
SME Working Capital Loan S$300,000 7% p.a. 5 years
SME Micro Loan S$100,000 7% p.a. 5 years
Business Term Loan S$550,000 10.88% p.a. 5 years

As you can see, the business loan products offered by the four banks are very similar, with only slight differences in interest rates, which can make it a tough choice for anyone. Of course, there are many other factors that we could have taken into consideration, such as the average processing time, rate of approvals, loan quantum approved, and the eligibility criteria.

However, to keep things simple and efficient, we decided that using the 3 most prominent criteria of the business loan would suffice as sufficient grounds for comparison.

Now, because of the similar business loan profiles between the four banks, we feel a need to mention that everyone’s choice is subjective at best. So when we reveal which bank WE think is the best bank for business loan, do not take our opinion to be absolute truth.

Instead, use the information that we have provided on the Capable Loans website as a guide, by all means, but we encourage all to carry out your own due diligence before you make a decision. You can also reach out to us via email – [email protected] – or call us at +65 9273 7185 and we will be happy to assist you through the business loan process.

Now for the moment of truth…

Please note that we are not, and will not be, making an explicit declaration of a “best” bank for business loan. This is by virtue of the fact that the term “best” is highly subjective, and because each of the four banks has different strengths and weaknesses.

However, we will state that our PREFERRED bank for a business loan would be DBS bank.

The business loan amount that your business will qualify for is dependent on a wide spectrum of factors.

First of all, your company will need to meet some basic criteria to be eligible for consideration. To be eligible for any unsecured business term loan, your company must meet the following criteria:

  • Company registered and operating in Singapore for at least 6 months
  • At Least 30% local shareholding
  • Company turnover at least S$300,000

If your company fulfills the above criteria, your company is then eligible to apply for an unsecured small business loan.

To actually qualify for a business bank loan, there will be more criteria and requirements to fulfill, which may vary slightly from bank to bank. Regardless, majority of the required documents are almost always the same.

Below is a list of the standard documents that you should prepare for your SME business loan application:

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

Here we also provide 3 best tips that will raise your chances of getting your SME loan application approved:

  1. Maintain balance of at least S$10,000 and above in company’s bank account
  2. The less outstanding debt on record, the higher your chance of qualifying for a business loan.
  3. As far as possible, try to reflect a positive net profit figure on your profit and loss statements

If you are able to meet all the requirements and conditions mentioned above, you should be able to qualify for a small business loan of between S$100k to S$300k.

It would go without saying that in order to be eligible for a business loan, you would need to own a registered business.

Here is the general eligibility criteria to qualify for a small business loan in Singapore:

  • 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

Additional Tips That The Banks Don’t Want You To Know:

  • Maintain a minimum average balance of S$10,000 in company bank account
  • If possible, pay off all outstanding personal and business debts.