Best SME Business Loans in Singapore 2020

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All the available resources, from government assistance schemes to small and medium enterprise loans, you can bank on to bridge the gap during choppy times.

COVID-19 and the resulting Circuit Breaker measures are causing revenue streams to dry up, and it is threatening many Small and Medium Enterprises (SME) to shutter. With depressed earnings since the start of the year, your business may be facing difficulties in continuing to pay suppliers, staff and rentals, or are struggling to keep afloat.

A business loan can help. Led by Enterprise Singapore, the government has made available two special assistance loan packages to supply businesses with the finances they need to keep operating. Apart from these, local banks and financial institutions (FIs) also offer an array of instalment loans and other credit tools. 

Read on for our recommendations on the best SME business loans in Singapore to help your business make it through. 

Best SME Business Loans 2020
Name of LoanMaximum Loan Loan TenureInterest and feesEligibility Apply at
SME Working CapitalS$1 millionUp to 5 yearsPer bank or FI assessmentBusiness must be registered and physically present in Singapore.
At least 30% owned locally.
Maximum borrower group cap of S$500 million. 
Maximum group revenue of S$100 million or 200 employees.
Banks: CIMB, DBS, HSBC, MayBank, OCBC, Resona Merchant Bank Asia, RHB, Standard Chartered, UOB
FIs: Ethoz Capital, Hong Leong Finance, IFS Capital, ORIX Leasing, Sing Investments & Finance, Singapura Finance
Temporary Bridging Loan S$5 millionUp to 5 yearsUp to 5% per annumBusiness must be registered and physically present in Singapore.
At least 30% owned locally.
Banks: CIMB, DBS, HSBC, MayBank, OCBC, Resona Merchant Bank Asia, RHB, Standard Chartered, UOB
FIs: Ethoz Capital, Hong Leong Finance, IFS Capital, ORIX Leasing, Sing Investments & Finance, Singapura Finance
OCBC Business First LoanS$100,000Up to 4 yearsPer bank assessmentBusiness must be registered and physically present in Singapore 6 – 24 months.
At least 30% owned locally.
No more than 10 employees or annual turnover less than S$1 million.
At least 1 guarantor Singaporean or PR between 21 to 62 with min annual income of S$30,000.
OCBC
UOB SME LoanS$100,000Up to 3 yearsPer bank assessmentBusiness must be registered and physically present in Singapore at least 12 months.
At least 30% owned locally, and more than 50% equity owned by individuals.
No more than 200 employees or annual turnover less than  S$100 million.
UOB
DBS Digital Business LoanS$200,000Up to 5 yearsPer bank assessmentBusiness must be registered and physically present in Singapore.
At least 30% owned locally.
DBS
StanChart Business Installment LoanS$300,000Up to 3 yearsUp to 11% per annum
Default fee: S$100
Business must be registered and physically present in Singapore at least 36 months.
At least 30% owned locally.
Minimum turnover of S$750,000 per annum.
Standard Chartered
UOB BizMoney LoanS$350,000Up to 5 years10.88% per annum
2% facility rate
S$500 annual fee
Business must be registered and physically present in Singapore for at least 36 months.UOB
Maybank Business Term LoanS$500,000Up to 5 yearsPer bank assessmentBusiness must be registered and physically present in Singapore for at least 36 months.
At least 30% owned locally.
Minimum turnover of S$300,000 per annum.
MayBank

Government-assistance schemes: SME Working Capital and Temporary Bridging Loan 

Announced by the Singapore government under the Solidarity Budget to help cope with the effects of COVID-19, the SME Working Capital and Temporary Bridging Loan are designed to provide broad-based assistance to affected businesses.

SMEs seeking relief should look towards these two loans first, given:

a) The risk share of 90% by Enterprise Singapore (which reduces lender risk and increases the chance of approval);

b) The option to defer principal repayment for the first 12 months of the loan (which helps businesses manage cashflow)

Also, if you apply under the Temporary Bridging Loan, you can enjoy interest rates capped at just 5% per annum. 

Best SME loans up to S$200,000: UOB SME Loan, OCBC Business First Loan and DBS Digital Business Loan

If your business requires only a small loan, say under S$200,000, you might want to check out these three SME loans.

OCBC’s Business First Loan

OCBC’s Business First Loan offers up to S$100,000 with a maximum tenure of 4 years. There is no paperwork or collateral required for this loan, but at least one Guarantor (Singaporean or PR 21 years old and above with annual income of minimum S$30,000) must be provided.  

UOB SME Loan

A similar loan is the UOB SME Loan, which also allows you to borrow up to S$100,000. However, the maximum repayment period is shorter, at 3 years. To qualify, your business must be at least a year old, 30% locally owned and with more than 50% equity held by individuals. Your business should also not have more than 200 employees and annual turnover should be under S$100 million. 

DBS Digital Bank Loan

Meanwhile, the DBS Digital Bank Loan allows you to borrow up to S$200,000, with a repayment period as long as 5 years. As the loan is offered under the Resilience Budget, you can therefore opt to pay only your interest charges during the first 12 months of your loan. To qualify, your business should be registered and physically operating in Singapore, and be at least 30% locally owned. No collateral is required to take up this loan. 

Best SME loans up to S$500,000: Standard Chartered Business Instalment Loan, UOB BizMoney Loan and MayBank Business Term Loan

If you’re looking for a business loan in the S$300,000 to S$500,000 range, Standard Chartered, UOB and Maybank may have the loans you need.

Standard Chartered Business Instalment Loan

The Standard Chartered Business Instalment Loan lets you borrow from S$70,000 to S$300,000 collateral free, and a loan repayment period of between 1 to 3 years. The effective interest rate of this loan will vary, but at present it is capped at a maximum of 11%. To qualify, your business must be Singapore-registered and operating for at least 3 years with a minimum annual turnover of S$750,000. At least 50% of the business must be held by Singaporeans or PRs. 

UOB BizMoney Loan

With a loan cap of up to S$350,000, the UOB BizMoney Loan offers slightly more business capital. The repayment period is also longer, maxing out at 5 years. The effective interest for this loan is currently pegged at 10.88% per annum, with a 2% facility fee (a.k.a processing fee). Do note that there’s also a S$500 annual fee. This loan is open to sole proprietorships, partnerships or private limited companies registered and operating in Singapore for at least 3 years.

Maybank Business Term Loan

If you’re seeking a business loan to the tune of half a million, the Maybank Business Term Loan may be suitable. This loan disburses up to S$500,000, and has a loan repayment of up to 5 years. To be eligible, your business must be at least 30% locally held, established for at least 3 years, and have a minimum annual turnover of at least S$300,000. 

Alternative financing options for SMEs

If somehow you don’t qualify for the SME loans discussed above, there are other ways to secure the finances you need to expand your business or to keep it going. You could consider:

  • Invoice factoring
  • Credit lines
  • Personal instalment loans

Invoice factoring is a business financing tool which trades in your outstanding invoices for cash. 

How it works: You sell your unpaid invoices to a third-party company, which pays a portion of the value of your invoices. The company that buys your invoices then takes responsibility for collecting the invoice payments. 

With invoice factoring, you can get up to 90% of the value of your invoices in cash, and there are many financial institutions in Singapore that offer this option (is it also sometimes known as receivables finance). While this might be a good way to get cash fast, know that you are sacrificing a portion of revenue upfront. Also, you may still be held liable for any unpaid or late invoices.  

Another option for businesses seeking capital is a credit line

How it works: This gives your business a line of credit to draw upon — up to a stipulated cap. The advantage of a credit line lies in its flexibility; you can use the funds in your credit line account according to your needs, and you only pay interest on the amount you have used. Credit lines also offer debt restructuring options to help you manage your borrowings. 

Last but not least, don’t overlook personal instalment loans. They offer a quick and convenient way to get the funds you need to tide your business over a dry spell, or to pay your suppliers so you can stay in business. Typically, you can borrow up to 6 to 8 times your monthly salary, and you can also choose a repayment period that suits your schedule.

Read These Next:
Guide to SME Grants and COVID-19 Measures to Support Businesses in Singapore
7 Sources Of Capital For Business Owners In Singapore
5 Ways to Cope With Financial Setbacks Hitting Singaporeans Hard Amid COVID-19
Best Personal Loan Promotions In Singapore 2020
Personal Loans, Balance Transfers and Credit Lines: The Pros and Cons Rundown


By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.