Best SME Business Loan Interest Rates in Singapore (2024)

business loan singapore interest rate

The COVID-19 pandemic has left many small businesses grappling with new challenges to keep the business going. Amidst the many uncertainties, banks and financial companies in Singapore have committed to helping SMEs improve their financial situations.

In response to Covid-19, the Monetary Authority of Singapore worked with financial institutions in the country to offer loan options for SMEs. Government-assisted loan schemes, like Temporary Bridging Loan and the SME Working Capital Loan, help small businesses sustain, recover, and thrive despite the current challenges. The goal is to lower their short-term repayment obligations and lower SME loan interest costs.

Are you in need of financial assistance for your SME? Here are some of the best SME business loan Singapore interest rates.

Business Loan Options In Singapore

1. SME Working Capital Loan

Launched in June 2016, the Working Capital Loan is a government-assisted financial scheme. It is meant to help SMEs finance their current operational needs.

With this business loan scheme, Singapore SMEs can loan up to S$300K with a loan tenure of up to 5 years. Enterprise Singapore partners with participating financial institutions (FIs) and offers 50%-70% risk-sharing.

2. Temporary Bridging Loan Programme

Introduced in the Solidarity Budget 2020, the Temporary Bridging Loan Programme (TBLP) is another government-assisted financial scheme. This loan option provides SMEs access to working capital for their business needs.

SMEs can loan up to S$3 million with a maximum loan tenure of 5 years. There are 19 participating financial institutions with an interest capped at 5% p.a. Additionally, the government risk sharing is at 70%.

The Temporary Bridging Loan Programme is further extended for 6 months – from 1 October 2021 to 31 March 2022.

3. Bank Business Loans

Aside from government-backed financial schemes, SMEs can also consider traditional bank business loans. An unsecured business term loan is a common form of a working capital loan.

Different banks offer different maximum loan sizes. For instance, with an OCBC SME business loan, you can borrow up to S$300,000 with a loan term of up to 5 years.

Banks also offer a variety of other loan products with higher-than-average maximum loan amounts. However, banks in Singapore are more selective and have a more stringent loan application process. That said, it may take longer for funds to be disbursed.

4. Moneylender Business Loans

Not qualified for any of the loans above? You may also consider taking out a business loan from licensed moneylenders in Singapore.

Licensed moneylenders offer unsecured loans to finance your business’ operational needs and long-term investment. With a licensed moneylender, you can loan up to S$200,000. The interest rate charged is between 5% and 15% with a loan tenure of up to 24 months.

Licensed moneylenders are not as strict as banks. In fact, your business only needs to be in operation for 1 year.

Want to compare your options? Take a look at the table below to find the best SME business loan that will suit your needs.

Best SME Business Loans 2024

Name of Loan Maximum Loan Amount Loan Tenure Interest and Fee Eligibility
SME Working Capital S$300,000 Up to 5 years Per bank or FI assessment
  • Business 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.
Temporary Bridging Loan Programme S$3 million / borrower Up to 5 years Per bank or FI assessment
  • Business must be registered and physically present in Singapore.
  • At least 30% owned locally.
DBS Working Capital Business Loan S$500,000 Up to 5 years 10.88% p.a.
  • Open to all businesses, including companies that don’t qualify for government-assisted loans
OCBC SME Working Capital Loan S$300,000 Up to 5 years 3.5% to 5% p.a. (EIR)
  • The company must be incorporated in Singapore for at least 2 years 
  • At least 30% Singaporean or PR shareholding
  • Group annual sales of ≤ S$100m or group employment size ≤ 200
UOB Bizmoney Loan S$350,000 Up to 5 years 10.88% p.a.Facility rate: 2% of the approved loan quantum

S$500 per year annual fee

  • Sole Proprietor, Partnership or Private Limited Company
  • Minimum 3 years in business
  • Registered and operating in Singapore
Maybank Business Term Loan S$500,000 Up to 5 years 10.88% p.a.Up to 2% of loan amount processing fee
  • At least 30% local shareholding
  • Established for at least 3 years
  • Minimum annual turnover of S$300,000
Standard Chartered Business Installment Loan S$300,000 Up to 3 years Up to 11% p.a.Default fee of S$100
  • Sole Proprietors / Partnerships / Private Limited Companies
  • Singapore-registered business
  • 50% or more shareholdings is effectively held by Singaporeans / Singapore PRs
  • Minimum 3 years of business operations
  • Minimum turnover of S$750,000
A1 Credit S$200,000 6-24 months 5%-15% per month
  • Business or the Company Must Be Registered In Singapore
  • Has Been Operating For At Least One Year
  • Minimum Turnover Of At Least SGD $60,000

Which Bank’s Business Financing Should You Choose?

Consider Government Assisted Business Loan First

Before you start shopping for a business loan, consider the SME Working Capital and Temporary Bridging Loan first. Here’s why:

  • The risk-sharing of 50% to 70% by Enterprise Singapore helps increase your chances of approval.
  • You have the option to defer principal repayment for the first year of the loan. This goes a long way in managing your business cash flow.
  • If you apply for Temporary Bridging Loan, you can enjoy interest rates capped at 5% per annum. This is a considerably low-interest rate as compared to banks and other FIs.

Traditional Bank Loans Are Best For SME Loans in the S$300,000 to S$500,000 Range

If your business does not qualify for government-assisted loans, your next best option is a traditional bank business loan. Different banks offer different loan products at different loan interest rates. That said, you need to consider your options carefully.

The typical business loan interest rate ranges between 9% and 12% p.a. Anything higher than those rates are considered an expensive loan.

From the list above, the OCBC SME Loan offers the best SME business loan interest rate at 3.5% to 5% p.a. (EIR). Plus, its eligibility requirement is much accessible for businesses with less than 3 years of operating experience.

Licensed Moneylenders Are Best For SMEs Who Are In Need Of Quick Emergency Cash

The loans from the government will no doubt help businesses tide over the financial crisis caused by the COVID-19 pandemic. 

However, applications for these loans may take time to process. In fact, traditional bank loans are known for their stringent eligibility requirements. So even if your business were to meet the requirements, you may not get the funds in time.

Alternatively, you can consider getting a business loan from licensed moneylenders, like A1 Credit.

You can borrow up to S$200,000 with a repayment period of up to 24 months. To qualify, your business must be registered in Singapore, operating for at least a year, and has a minimum turnover of at least S$60,000. With these requirements, even startups can qualify.

Alternative Financing Options

If you don’t qualify for the SME loans listed above, there are other financing options you can consider.

1. Invoice Factoring

Invoice factoring is a type of business financing wherein businesses trade their outstanding invoices for cash.

How it works: You will be selling your outstanding invoices to a financial institution. You will be able to advance up to 90% of the value of your invoice. Plus, the third-party company will be in charge of collecting payment from your customers.

This may be a good option to get fast cash but you’ll also be sacrificing a portion of your revenue upfront.

2. Credit Lines

A business line of credit is one of the short-term working capital SME loans available for businesses.

How it works: Credit lines work similarly to a personal credit card. This means your business can draw funds from a pre-approved sum of capital anytime. One of the benefits of this financing option is that interest will only be charged when you borrow an amount from the account.

That said, you can borrow an amount according to your needs and only pay interest on the amount you’ve used.

3. Personal Loans

Lastly, you can also take out a personal loan. With a personal loan, you will receive the loan amount you need to tide your business over financial challenges. You can use the disbursed amount for anything that your business needs, such as paying bills, paying suppliers, and more.

When you apply for a personal loan, you can borrow up to 6 times your monthly salary with moneylenders. Additionally, you can choose a repayment period that suits your needs. Lastly, personal loans typically have lower interest rates than traditional SME loans.

Frequently Asked Questions About SME Business Loans

1. What Is The Range Of Interest Rate For Business Loans In Singapore?

Business loans interest rates in Singapore differ from various financing institutions. The rates also change depending on the financing option. Here are the range of interest rates for the most common SME business loans:

Loan Type Interest Rate (EIR)
Unsecured Business Term Loan 9% – 12% p.a.
Temporary Bridging Loan 2.75% – 5% p.a.
Working Capital Loan 3.75% – 6% p.a.
Moneylender Business Loan 5% – 15% per month

2. What SME Loans Are Available For Startups in Singapore?

The Singapore government offers attractive cash grants and funding schemes that help grow a business. Startups or SMEs that do not have much of a business history yet are eligible for these financial schemes.

Here are some of them:

  • Startup SG: Offers funding sources and mentorship programs. Startups can access cash grants, equity financing, and SME loans.
  • Startup SG Equity: The Singapore government will co-invest with 11 private investment partners in startups that need capital.
  • Startup SG Tech: Provides project funding for SMEs so they can develop breakthrough technology.
  • Startup SG Founder: This scheme is for new entrepreneurs with innovative business ideas.

Startups can also consider applying for traditional bank loans. Some banks, like DBS and Maybank, have SME Micro Loans where startups are eligible.

3. What Documents Do You Need When Applying For A Business Loan?

Here are some of the most common documents required when applying for a business loan:

  • All directors and partners NRIC
  • Most recent information report (Business Profile) from the Accounting & Corporate Regulatory Authority
  • Most recent Income tax assessment notice (both personal and from the company)
  • Most recent financial statement
  • Most recent invoices or business contracts
  • Most recent utility bills under the company name
  • Most recent 6-month bank statements
  • List of assets owned by the company, directors & partners (if any)
  • Office / Shop Tenancy Agreement (if any)

4. How Long Before My Business Loan Application Is Approved?

It varies depending on the financial institution. Most banks and FIs require at least a few days for loan applications to be approved. This is because they have a strict evaluation and screening process.

Licensed moneylenders, on the other hand, can approve a business loan within an hour.


Key Takeaways

  • The Monetary Authority of Singapore partnered with financial institutions in the country to offer loan options for SMEs.
  • SME Working Capital and Temporary Bridging Loans are government-assisted financing schemes that offer lower business loan interest rates.
  • Aside from government-backed financing schemes, SMEs can also consider traditional bank business loans and licensed moneylenders to get the funds they need.

A licensed moneylender in Singapore can provide fast cash to help you pay for emergency expenses. Apply for a business loan today at A1 Credit to cover urgent financial gaps. We offer competitive, flexible loans to suit your financial capacity. Check out our business loan plans now.

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