An Overview of SME Business Loans in Singapore

Business funding will probably be necessary at some point in the company’s journey, especially if you are a small- to medium-sized enterprise (SME) owner in Singapore. Commercial real estate purchases, inventory purchases, working cash shortfalls, and business expansion are all possible with SME loan Singapore.

Types of Small and Medium Enterprise Business Loans in Singapore

1. Line of Credit

A line of credit is a type of credit arrangement that allows borrowers to take out loans whenever they need them. Credit lines come in fixed or revolving forms. Like a credit card, the line of credit will reset to its full amount once the balance is paid.

A credit line’s advantages for small and medium enterprises include:

• To cover unforeseen costs or in times of emergency
• Address dry spells in seasonal cash flow.
• filling the money flow gap while awaiting payment from clients

2. Loans for Equipment

As the name implies, this loan would not be necessary if your company did not want equipment or cars. If not, this kind of loan will still be quite helpful because, depending on your company’s credit, financial situation, and age, they typically offer very reasonable rates, beginning at 8%.

3. Invoice Financing

Another well-liked and relatively new finance option for B2B companies is invoice financing. Invoice finance involves utilizing your unpaid bills to obtain an advance payment from the lender. However, major B2C companies and those that don’t bill clients won’t be eligible for such financing options.

When you use financing for invoices, the lender gives you a portion of the total invoice amount, for instance, 80% and retains the remaining balance. You can use the advance to pay bills while you wait for your consumers to pay. The lender is going to charge a weekly fee.

4. Credit Cards for Businesses

Many people think of using credit cards for pleasure rather than professional purposes. But when you need to borrow money quickly to cover expenses, business credit cards might be a cost-effective choice. Most credit cards also provide:

• Refunds
• Bonus points
• 0% interest rates for the first time
• Protection or insurance for purchases made for travel, renting a car, etc.

The Singaporean Business Loan Application Process

The steps in obtaining a business loan in Singapore are outlined below, along with specific prerequisites at each level.

1. Apply in person at the branch or online. 

You can apply online or in person at any bank or financial institution that has a digital application platform.

Get your NRIC and get ready to apply online by logging onto MyInfo.

2. A financial institution’s initial follow-up contact

The relationship manager (RM) will contact you to inquire further about your business and corporation such as the number of directors and the nature of the enterprise.

To ensure that the RM completely understands your firm’s financial condition and can help you in any manner, be honest about it.

3. Submission of Documents

Applications for business loans require five key types of documentation. You can access it here.

On a case-by-case basis, some financial institutions might ask for additional papers.

4. A Follow-Up Call from Financial Organizations

Following document submission, a follow-up contact could be made to get clarifications on the papers and information submitted.

5. Approval Process

Your documents will be submitted for approval by the RM.

6. Making the Business Loan Proposal Presentation

Following acceptance, the RM overseeing your case will devise recommendations and solutions tailored to your company’s requirements.

7. Site Inspection

To have a deeper understanding of your operational processes, the RM might ask to visit your factory or business premises, depending on the nature of your business.

8. Sign official communication.

Check the details before signing the loan agreement, including the loan amount, interest rate, rate type, penalties, and defaults.

9. Fund Disbursement

The funds are transferred in the form of payments to your company’s bank account.

To determine which kind of loan will work best for your company, you must weigh your options and make a decision. You will then have access to a variety of lending choices to expand your company.