Find The Best Business Loan In Singapore

Last Updated On 15/09/2017

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Introduction

Is the growth and profitability of your business stuck in 2nd gear? Sometimes, the biggest bottleneck in business isn’t technology, human resource or ideas – it’s money. A business loan can give your company a timely boost, and a distinct strategic advantage to capitalise on opportunities here and now. 

Leverage on a low cost business loan to invest in your business, build inventory or develop cutting edge technology - and grow your profits to all-new levels of success.

Beginners’ Mistakes

A business loan can provide you with much needed capital to meet necessary business expenses and enable growth plans. You just need to choose the right loan and ensure these following mistakes, aren’t yours:

Common Beginners’ Mistakes

  1. 1Taking up a generic business loan when there are specific-purpose business loans available that can provide better terms.
  2. 2Neglecting to read the fine print and fully understand the details of the loan conditions.
  3. 3Waiting till the last minute to apply for a business loan. There may be situations when you urgently need cash, for example to pay a supplier, and loan applications take time. Do make your business cost projections and ensure that you apply for the loan in good time, to avoid having to pay more to expedite the process.
  4. 4Not making a reasonable forecast of your business cash flow before taking up a business loan. You may find times when there is insufficient cash to settle your loan instalments.
  5. 5Failing to treat opportunity cost as a real cost. At the speed that businesses run at, time is money, and the time spent waiting for a loan to come through may be better spent growing the business. Hence, the best loan offer may not always be the one that provides the lowest interest rate, but rather the one that best fits your business timelines.
  6. 6Making major changes to your business or personal finances right before (or while) applying for a business loan. The lending bank will perceive any such substantial changes as a potential red flag which may negatively impact your loan terms or even eligibility.
  7. 7Disregarding your own personal credit rating score. Small businesses are unequivocally tied to the owner, and lending banks will look into your personal finances to determine the loan terms.
  8. 8Not having your business’ financial records updated and organised for submission to the bank. Providing messy records may jeopardise your loan eligibility or lead to unfavourable loan terms.
  9. 9Borrowing more than what the business needs or more than what the business can afford to repay. This may lead to late repayment penalties or legal action.
  10. 10Failing to seek expert advice! You may have the expertise to run your business, but financing is a different ball game. If you need help, just approach us for a professional consultation on choosing the ideal business loan.

SME Micro Loan

Keep growing your business with access to greater financing supported by SPRING Singapore! Under the SME Micro Loan Scheme, Companies can access working capital financing to support their day-to-day business operations better with the government sharing the risk with banks! Ensure you have sufficient cash flow with easier access to funds and grow your business better!

Loan Features:

Easier Loan Approval! – 50% Government Risk Sharing, Loan Approval Is Now Easier And Faster!

Loan Amount – Maximum loan amount of $100,000

Repayment Period – Up to 4 years

Interest Rate - Fixed at 2.90% (Simple Interest) 5.5% (Effective Interest)

 

Eligibility:

Company registered and operating in Singapore

At least 30% local shareholding

Best Business Loan Singapore

Participating Financial Institutions

Simple Interest Rate (p.a.)

2.9%

Effective Rate (p.a)

5.5%

Loan Amount

Maximum $100,000

Loan Tenure

Up to 4 yrs

Min. yrs of operation

2yrs

2yrs

3yrs

2yrs

Participating Financial Instituition

2.90% (5.5% EIR)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

2.90% (5.5% EIR)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

2.90% (5.5% EIR)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

2.90% (5.5% EIR)

Simple Interest Rate (p.a.)

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SME Working Capital Loan

Keep your business going with access to financing supported by SPRING Singapore! Designed to provide SMEs with a way to allow SMEs to get financing in the difficult years between 2016 - 2019, the SME Working Capital Loan was introduced in Budget 2016 to aid local SMEs . This is a government assisted financing scheme that allows SMEs to access up to $300,000 working capital to grow your business with low-interest rates thanks to risk sharing with the government.

Loan Features:

Easier Loan Approval! – 50% Government Risk Sharing, Loan Approval Is Now Easier And Faster!

Loan Amount – Maximum loan amount of $300,000

Repayment Period – Up to 5 years

Interest Rate - Simple interest rate ranging from 2.9% per annum to 3.6% per annum

 

Eligibility:

Company registered and operating in Singapore

At least 30% local shareholding

Group annual sales of ≤ S$100m or group employment size ≤ 200

Popular Business Loan Singapore

Participating Financial Institutions

Simple Interest Rate (p.a.)

3.6%

3.3%

3.6%

3.6%

4.6%

3.6%

3.6%

Effective Rate (p.a)

6.75%

6.5%

6.75%

6.75%

8.75%

6.75%

6.75%

Min. yrs of operation

2yrs

2 yrs

3 yrs

3 yrs

3 yrs

2 yrs

3 yrs

Participating Financial Instituition

3.60% (6.75% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

3.30% (6.50% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

3.60% (6.75% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

3.60% (6.75% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

4.60% (8.75% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

3.60% (6.75% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

3.60% (6.75% E.I.R)

Simple Interest Rate (p.a.)

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Business Term Loan

 

Loan Features:

Loan Amount – Maximum loan amount of $500,000

Repayment Period – Up to 5 years

Interest Rate - Simple interest rate ranging from 5.7% per annum to 5.9% per annum

 

Eligibility:

Company registered and operating in Singapore

At least 30% local shareholding

Participating Financial Institutions

Simple Interest Rate (p.a.)

5.9%

5.9%

5.7%

5.9%

5.7%

5.9%

5.9%

5.7%

Effective Rate (p.a)

10.88%

10.88%

10.5%

10.88%

10.5%

10.88%

10.88%

10.5%

Loan Amount

max $500,000

max
$500,000

max
$350,000

max
$300,000

max
$350,000

max
$500,000

max $300,000

max
$300,000

Participating Financial Instituition

5.90% (10.88% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.90% (10.88% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.70% (10.50% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.90% (10.88% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.70% (10.50% E.I.R)

Simple Interest Rate (p.a.)

Enquire

Participating Financial Instituition

5.90% (10.88% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.90% (10.88% E.I.R)

Simple Interest Rate (p.a.)

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Participating Financial Instituition

5.70% (10.50% E.I.R)

Simple Interest Rate (p.a.)

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Frequently Asked Questions (FAQ)

Eligibility for a business loan differs from bank to bank, but most require the company to have commenced business operations for at least a certain number of years, a baseline amount of annual turnover, as well as a minimum percentage of local shareholding (Singaporean/Permanent resident). Documentation such as the company’s past financial statements, operating bank current account statements and notices of assessment for income tax has to be submitted to the lending bank.

Collateral is usually required and may include property, machinery and equipment, inventory, etc. If you are borrowing money to buy a physical asset, such as machinery, the lending bank may provide you the loan and place a lien on the new asset.

Most banks offer a generic business loan, as well as specific-purpose business loans, such as working capital loans, plant & machinery loans, accounts receivables loans, business acquisition loans, etc. Feel free to speak with us to find out more on the different types of business loans provided by the various banks.

There will typically be minimum and maximum loan amounts which will vary according to the chosen lending bank, the business purpose of the loan and the financial health of both the business and the owner.

Most banks have a fixed series of loan tenures to choose from (1, 3, 5 years and so on) and any limitations will usually depend on the loan amount, the financial state of the business, as well as your personal finances.

Some banks allow you to take on more than one business loan at the same time, while some may place restrictions. It is important to declare any outstanding loans during your application.

Prepayment is typically allowed but you may be charged a prepayment fee to compensate the lending bank for its loss of future interest payments.

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