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Best SME Micro Loans in Singapore: How to Get the Best Deals

sme micro loan
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Small and Medium Enterprises (SMEs) are a key part of the economic landscape of Singapore. SMEs are responsible for providing jobs to many Singaporeans, and their contribution to the GDP is significant. However, due to their small size, SMEs often have difficulty obtaining financing from larger banks. 

To help SMEs with their financial needs, micro loans are available from banks, licensed moneylenders, and other financial institutions.

What is SME Micro Loan Program?

SME micro loans are short-term loans specifically tailored to the needs of small and medium sized enterprises. The size of the loan varies, but typically ranges from S$1,000 to S$300,000. 

The eligibility criteria for these loans vary depending on the lender, but typically include having a valid business registration, proof of income, and a good credit score. 

The benefits of taking out an SME micro loan include receiving quick approval, access to the funds within a few days, and competitive interest rates.

Best Micro Loans in Singapore

SMEs have access to various types of micro loans to support their businesses. Two of the most popular financing scheme are business loans offered by banks through the Government’s SME Working Capital program and loans from licensed moneylenders. 

These loans are known for their flexibility, fast processing times, and competitive interest rates, making them some of the best SME micro loans available in Singapore.

1. Government-Backed SME Micro Loan Program

The Singapore government offers SME micro loan program called SME Working Capital to support small businesses in the country. This micro loan program is administered by Enterprise Singapore.

Features

Criteria Features

Maximum Loan Amount

S$300,000/borrower (S$500,000 from Oct 2022 – Mar 2024)

Borrower Group Limit

S$5 million for EFS-WCL

Overall Loan Exposure Limit

S$50 million per borrower group

Maximum Repayment Period

5 years

ESG Risk-Share

50% (70% for young enterprises)

Interest Rate

Subject to PFIs’ assessment of risks involved

Eligibility

  • Be a registered business entity physically located in Singapore.
  • Have at least 30% local equity held by Singaporeans and/or Singapore Permanent Residents.
  • Have a group annual sales turnover of not more than S$500 million.
  • For “SME Working Capital,” the SME definition is a group revenue of up to S$100 million or a maximum employment size of 200 employees.

Where to Apply: Participating Financial Institutions

The participating financial institutions have been appointed by the agency to provide micro loan financing under the program.

  • CIMB Bank Berhad
  • DBS Bank Ltd
  • ETHOZ Capital Ltd
  • FS Capital Pte Ltd
  • Goldbell Financial Services Pte Ltd
  • The Hongkong and Shanghai Banking Corporation
  • Hong Leong Finance Ltd
  • IFS Capital Ltd
  • Maybank Singapore Ltd
  • Malayan Banking Berhad, Singapore Branch
  • ORIX Leasing Singapore Ltd
  • Oversea-Chinese Banking Corporation Ltd (OCBC Bank)
  • Resona Merchant Bank Asia Ltd
  • RHB Bank Berhad
  • Sing Investments & Finance Ltd
  • Singapura Finance Ltd
  • Standard Chartered Bank
  • United Overseas Bank Ltd

2. Non-Bank Financial Institution: Licensed Moneylender

Licensed moneylender can also be considered as an alternative micro loan option for SMEs in Singapore. These are financial institutions that are licensed and regulated by the government to provide loans to individuals and businesses.

Features

Financing Institution Loan Amount Interest Rate Repayment Period Processing Time Credit Score Requirement

Licensed Moneylender

Up to S$200,000

5-15% p.a.

Up to 2 years; there’s no early repayment fee

Within the day

Not required

Traditional Financing Institutions

Up to S$1,000,000

From 2.5% p.a.

Up to 5 years

Several days to a few weeks

Usually required

Eligibility

  • 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)
smart confidence asian woman holding notepad

Which is Better for You?

It may be easier to obtain a micro loan from a licensed moneylender compared to traditional financing institutions such as banks and government-backed loans. Licensed moneylenders typically have more relaxed credit score requirements and can provide financing quickly, often within the same day.

However, licensed moneylenders may charge higher interest rates compared to traditional financial institutions, and their loan amount is limited to a maximum of S$200,000. On the other hand, government-backed micro loan loans have a maximum loan quantum of S$500,000 from Oct 2022 to Mar 2024 and have a longer repayment period of up to 5 years.

It’s important for SMEs in Singapore to carefully evaluate their financial needs and repayment capabilities before choosing a lender, and to consider all available SME micro loan options including government-backed loans, licensed moneylenders, and traditional financing institutions.

Here’s a comparison table of government-backed unsecured working capital vs licensed moneylenders for your easy reference:

Criteria Banks through the Government’s SME Working Capital Licensed Moneylenders

Maximum Loan Amount

S$300,000/borrower (S$500,000 from Oct 2022 – Mar 2024)

Up to S$200,000

Borrower Group Limit

S$5 million for EFS-WCL

Not applicable to business loans

Overall Loan Exposure Limit

S$50 million per borrower group

Not applicable

Maximum Repayment Period

5 years

Up to 2 years

ESG Risk-Share

50% (70% for young enterprises)

Not applicable

Interest Rate

Subject to PFIs’ assessment of risks involved

5-15% p.a.

Processing Time

Several days to a few weeks

Within the day

Credit Score Requirement

Usually required

Not required

Closing

SME micro loans are a great way for small and medium enterprises to obtain financing quickly and easily. There are many banks and licensed moneylenders offering SME micro loans in Singapore, and the best one can be chosen by comparing the different lenders and their offerings. 

Key takeaways

  • SME micro loans are short-term loans tailored to the needs of small and medium enterprises, ranging from S$1,000 to S$300,000.
  • Eligibility criteria for micro loans vary but typically include having a valid business registration, proof of income, and a good credit score.
  • Government-backed micro loans have a maximum loan amount of S$500,000, a repayment period of up to 5 years, and a credit score requirement. 
  • Licensed moneylenders offer loan amount up to S$200,000, with a quicker processing time and relaxed credit score requirements.

If you’re an SME seeking micro loan or small financing, applying for a business loan can be an excellent option. With the right loan, you can quickly and easily access the funds you need. To explore your financing options, request free loan quotes from us at Loan Advisor. We offer three free quotes from top lenders, with no obligation to apply.

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