FAQs

In order to be eligible for a loan, you must be:

• A Private Limited Company registered with ACRA.
• Minimum 30% shareholding by Singaporean / Permanent Resident or foreigner residing in Singapore.
• Your business should also have an annual revenue of at least $100,000.
• Preferably, your business has also been in operation for at least 6 months.

“We are well familiar with the documentation and information banks may require, leave the tedious process to us, we deliver results faster by making sure all the information is submitted correctly and quickly.”

There are more than 20 banks and financial institutions that provide loans to small businesses in the local presence, business owners can apply for business loans with any of the lenders as long as the company meets the application criterias.

Take note that each lender has different requirements and preferences when it comes to credit and risk, some banks may avoid certain industries, while others may be more welcoming. Many SMEs are unaware of which banks are suitable for their specific needs and end up wasting time approaching every banks and leaving bad records.

“We’re lender-neutral. Our team work for you instead of banks. We are familiar with the credit criteria of various banks, you can rely on us to find the best facilities that suit your needs. 

We understand how tedious it can be to schedule appointments with each and every banks. We are here to help you navigate various loan products from different banks and find the best deal for your company.”

Banks

Most SMEs typically turn to banks as first port of call for financing. Banks have well-structured lending systems and offer a wide range of financing options for SMEs. There are several local and foreign banks in Singapore that cater to SMEs, including DBS, UOB, OCBC, Maybank, Standard Chartered Bank, Citibank, CIMB, HSBC, RHB, and others. Each bank has different criteria for credit approval, as well as varying interest rates, loan amounts, and terms. It’s important to compare the products offered by different banks. While bank loans are generally the most affordable option, getting approval can be challenging and time-consuming for many SMEs. Banks have strict credit assessments due to the perceived higher risk in SME lending. Unfortunately, banks don’t publicly disclose their SME loan approval rates. A study conducted in 2015 found that 40% of SMEs lack banking support. If your company has strong financials, a healthy cash flow, and is willing to wait a few weeks to a month for the assessment process, bank loans would be the best choice.

Financial Institutions

Financial institutions (FIs) also conduct lending to SMEs, but they don’t have full banking licenses. There are several FIs that serve the SME market, such as Hong Leong Finance, Singapura Finance, Sing Investments & Finance, and others. While FIs offer unsecured SME loans like banks, they mostly specialise in asset-based lending, such as factoring or equipment loans. In February 2017, the MAS announced new regulations allowing finance companies to provide larger amounts of unsecured SME financing, up to 25% of their capital funds, compared to the previous limit of 10%. This change is expected to free up around $550 million in potential SME loans. In the third quarter of 2018, Hong Leong Finance, Singapore’s largest finance company, experienced a record-high loan book of S$10.3 billion to SMEs following the relaxation of lending rules in February 2017.

P2P Crowdfunding

Peer-to-peer crowdfunding is a popular trend in financial technology (fin-tech). It involves pooling funds from multiple investors through an online crowdfunding platform to provide debt financing to companies. These platforms connect borrowers (SMEs) with lenders (individual investors) and facilitate the financing process. Businesses looking for loans are listed on the platform, and investors can view their basic financial information and participate in funding. Crowdfunding is a good option for SMEs that don’t qualify for traditional bank loans because the credit requirements are usually less strict. However, interest rates for these loans are higher to compensate investors for the higher risk. Most P2P small business loans have short terms, ranging from one month to a year. Since June 2016, P2P platforms operating locally in Singapore must be regulated by the MAS and obtain a Capital Market Service license.

Alternative lenders

In addition to the above mentioned intermediaries, there are alternative lenders in the SME financing market. These lenders are often smaller and cater to niche market. Some are private investors who lend directly to SMEs, while others are online lending platforms acting as direct lenders. Interest rates from these alternative lenders are usually the highest compared to other funding options. They are typically seen as a last resort for borrowing.

“We’re an officially appointed consultancy of DBS, UOB, OCBC, CIMB, SCB and Maybank, with access to funding solutions from over 20 different financial institutions – which allows us to quickly secure facilities for your business.”

There are several types of business loans available for SMEs with different needs. These include:

• Working Capital loan
• Business term loans
• Trade financing
• Factoring
• Receivables financing
• Asset financing
• Project-based financing
• Business Overdraft
• SME Micro Loan

“We understand that it can be challenging to navigate through the complexities and technical terms to find the right loan. We can explain these financing options in plain language to simplify the process for you.”