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Getting the Best SME Business Loan: Singapore Interest Rate Offers to Consider for Your Business (2022)

business loan singapore interest rate
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A steady flow of revenue is the lifeblood of Small and Medium Enterprises (SME). Any business needs money to pay for maintenance, employees, supplies, and further development. There however may be instances where money becomes tight, leaving businesses teetering into the red, or a business opportunity presents itself and the business finds itself lacking the funds to grab it.

These days, due to the advent of COVID-19, many businesses find themselves running short on revenue, putting them on the brink of shutting down.

This is where business loans come in. A business loan can provide the much-needed funds that a business can use to direct into whatever they need to keep operating. In response to the recent pandemic, the Singapore government has sought to provide two special assistance loan packages to SMEs. But other than that, banks and financial institutions (FIs) also offer an assortment of loans for businesses. 

The Best SME Business Loans in Singapore and Their Interest Rates

Name of Loan Maximum Loan Loan Tenure Interest and fees
SME Working Capital S$1 million Up to 5 years Per bank or FI assessment
Temporary Bridging Loan S$3 million Up to 5 years Up to 5% per annum
OCBC Business First Loan S$100,000 Up to 4 years Per bank assessment
DBS Business Loan S$500,000 Up to 5 years Per bank assessment
Standard Chartered Business Installment Loan S$300,000 Up to 3 years
  • Up to 11% per annum
  • Default fee: S$100
UOB BizMoney Loan S$350,000 Up to 5 years
  • 10.88% per annum
  • 2% facility rate
  • S$500 annual fee
Maybank Business Term Loan S$500,000 Up to 5 years Per bank assessment


Government Schemes

With the advent of COVID-19, the Singapore Government launched measures to address the financing needs of SMEs in response. These measures come in the form of relief packages, namely the SME Working Capital and Temporary Bridging Loan (TBL).

Why choose government financing?

  • You can defer principal repayment for the first 12 months of the loan, helping you manage cash flow better;
  • TBL interest rates are capped at 5% p.a.
  • The risk share of 70% by Enterprise Singapore. This increases your chances of approval because of less lender risk.
  • Government-funded small business loans are significantly more trustworthy.

1. SME Working Capital Loan

Among the many SME loans available in Singapore is SME Working Capital Loan. It is a business loan that is made available to SMEs, or businesses with a maximum number of 200 employees.

In partnership with most banks, Singapore is set to offer business financing with a maximum loan amount of up to S$1 million to the SME business, with a tenure of 1 to 5 years.

The business loan is available to small businesses registered in the country that are at least 30% owned by Singaporeans/PRs.

2. Temporary Bridging Loan

The programme is another among the pair of government-backed business loans in Singapore, provided in response to the pandemic, and functions much like other working capital loans in Singapore. Find out more on the best bridging loan in Singapore.

A working capital loan is not limited to small businesses and is open to any kind of enterprise and new business.

This business loan is available to Singapore-registered companies that are at least 30% owned by locals. Originally, the business loan offered a loan amount of up to S$5 million. The offer only lasted until 31 March 2021. The extended version of the programme offers only up to S$3 million, with a government risk share of up to 70%, and the interest rates capped at 5% p.a only until 30 September 2021.


Banks are also a good source of business financing for SME loans. Different banks have different financing options the small business owner can make use of when they find themself in need of equipment financing, or short on funds to pay off employees’ monthly salary and continue daily operations during business days. Most banks will have different business loan options for you.

Why choose business loans from banks?

  • If you only want to borrow a smaller business loan amount
  • The Temporary Bridging Loan, while having an ideal interest rate, is only a temporary programme. Banks and financial institutions provide long-term loans with competitive rates at any given point.
  • Often has no collateral required
  • Some requirements may be more ideal for your business.

3. UOB Bizmoney SME Loan

Among the SME business loans provided by banks is the UOB Bizmoney Business Loan. It has a maximum loan amount of S$350,000 and a repayment period of up to 3 years.

The current effective interest rate for this business loan is 10.88% per annum. You must also pay a 2% processing fee and an annual fee of S$500. The loan is an unsecured business term loan, as such does not require the applicant company to pledge any property or deposit as collateral, but personal guarantee(s) may be required.

This loan is available to sole proprietorships, partnerships, or private limited companies that are registered and have been operating in the country for at least 3 years.

4. OCBC Business First Loan

OCBC’s Business First Loan is an SME micro-loan that offers financing of up to S$100,000 with a longer tenure of 4 years. This startup business loan is similarly an unsecured business term loan, and, as is the case with unsecured loans, OCBC’s offer requires no collateral.

Start-ups of less than 10 personnel can take full advantage of the loan, as the demanded group employment size must not exceed that number. However, there must be at least one guarantor who is a Singapore Citizen or PR, aged 21 to 62 years old and has a minimum annual income of S$30,000. The interest rate will also depend on bank assessment.

5. DBS Business Loan

The DBS Business Loan offers loan financing for a hefty amount of S$500,000 and tenure that can stretch as long as 5 years for repayment. This similarly does not require any collateral.

In addition, DBS also offers a variety of loan options to cater to your specific need, with micro-loans applicable for a small business and financial products that will be better tailored to your financial situation. Interest rates will depend on bank assessment.

6. Standard Chartered Installment Loan

This business financing option offers a loan amount that can range from S$70,000 to S$300,000 with flexible tenure from 1 year to 3 years. Like most small and medium enterprise loans, the package has collateral-free financing.

To qualify for the business loan application process, the company must be registered in the country and operating for at least three years, with a minimum annual turnover of S$750,000, and 50% shares held by citizens or PRs. The effective interest rate of this loan will vary, but at present, the nominal interest rate is at an 11% maximum.

7. Maybank Business Term Loan

The Maybank Business Term Loan makes S$500,000 financing available for a repayment period of up to 5 years and no collateral requirement. The business must be established for at least 3 years, have a minimum annual turnover of no less than S$300,000, and have 30% held by Singapore citizens or PRs.

The interest rate will vary and depend on bank assessment. Maybank also offers an assortment of other loan options, from micro-loans, loans based on fixed assets, a startup business loan for working capital, and more, should you feel the need to explore more options.


Aside from banks and their attached government-backed SME loans, you also have the option of going for other lenders that are licensed by the Monetary Authority of Singapore (MAS). The interest rates and eligibility for a business loan application will vary for each, but these can be an option due to their relatively more lax requirements.


Alternative Financing Options for SMEs

Aside from the above loan options, you have other options to secure the funds you need to continue business operations or development, such as:

  • Credit line – Getting your business a line of credit is a convenient way of getting much-needed finances. You may only be limited to a stipulated cap, but the greatest advantage of a credit line is found not only in its convenience but also in its flexibility. The funds in your credit line account are readily available to you should you need them, and you would only need to pay interest based on the amount you have used. What’s more, credit lines also provide debt restructuring options to help you better manage your loans.
  • Invoice factoring – By selling your unpaid invoices to a third-party business, they can pay a fraction of your invoices and collect invoices themselves. You can get 90% for your invoices upfront, but you will be sacrificing a portion of your revenue upfront, and still be held liable for any unpaid invoices.
  • Personal loans – Personal loans are also a viable option for financing. While limited to 6 to 8 times your monthly income, the loan will be good for an emergency, and usually comes with flexible payment options.


Other Things to Note

1. What are the documents required?

Depending on your chosen lender, required documents may include your business license, an SME Banking Consent Form, financial statements, bank statements, tax assessments of your guarantor as well as their identification, among other things.

2. How long is the application process?

As most business loans, even government-backed programmes, are available at banks, the length of processing may vary, but some promise to respond within a single day. Some lenders may charge a processing fee.

3. Can I get a business loan if I have a bad credit score?

Although a low credit score may limit your options, it is only one of the many factors that a lender takes into consideration. You can still improve your chances by propping up other aspects, like asking for a lower loan amount, having a strong guarantor, opting for a collateral loan, and providing a detailed business plan to make a good argument regarding your company’s ability to repay. It is generally suggested to make good on your loans from here on by making early repayment of your monthly fees.

4. How can I find the best business loan?

Thorough research is ideal when it comes to browsing for any sort of financial product. Don’t be afraid to shop around as an ideal option may present itself.

As it stands the best SME loans are currently the government-backed packages you can find in a variety of different banks. The significantly lower interest rates alone are ideal, with the higher loan maximum giving businesses more chances to secure larger financing. The Temporary Bridging Loan also provides an option for businesses that do not fall under the category of small to medium enterprises.

Be mindful that the loan is only available up until 30 September 2021.

However, you may find the need to look for other options for financing. The best way to do this is to consult expert loan comparison services to help you look for financial solutions tailored exactly to your needs.

So when you’re looking for the best business loan to get in Singapore, check out our loan comparison services at Loan Advisor.

We can help you find the best loan within a curated selection of the top-rated licensed moneylenders in Singapore.

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