Startup Business Loan in Singapore : How and Where to Apply

Startup Business Loan in Singapore : How and Where to Apply

Singapore gives aid to any start-up business because it prioritizes innovations and technology-based solutions in upgrading its existing systems and technology. Financial institutions in the country heed and examine the many innovations that stem from the country.

In doing so, they respond with many varieties of business loans in Singapore. A start-up Singapore business loan is a micro-loan for individuals with compelling ideas but requires a financial springboard to bring them to life. Here is everything you need to know about them.

What is a Startup Business Loan?

Every business in Singapore requires an initial investment to fund its employees, equipment, facilities, and other essentials. However, standard business loans require more than one year of business establishment. Furthermore, the amounts they supply can be too expensive for start-up business owners.

In this light, the country’s financiers create a unique line of Singapore business loans that give micro or start-up businesses lower interest rates and loan amounts with a minimum of SGD $100 000 to jump-start their new business. All small businesses in Singapore can now have adequate working capital thanks to startup business loans.

Business man thinking

How Do Startup Business Loans Work?

Truthfully, start-up business loans function similarly to any other personal financing or business loan. The only difference is its available amounts, interest rates, and repayment periods.

Conventional business loans provide business owners an average of SGD $5 million, which they will need to pay for at least half a decade. However, micro-business owners that only require sufficient capital without lengthy payment periods and high-interest benefit greatly from startup-oriented loans. Applying for a business loan to cover up business debt? Check out how to better manage your business debts with SME Loans.

List of The Startup Business Loan Options in Singapore

If you’re planning to establish your brand in Singapore, you have plenty of financing options. Just make sure to fulfill all the requirements each financial institution requires from you, and you’re good to go.

Here is a list of all the start-up loans available in Singapore:

Startup Loan Project
Interest Rate (Per Year)
Maximum Loan Amount
Repayment Period
SME Micro Loan
3.5-4.5%
S $100,000
1-5 years
SME Venture Loan
2.5-11%
S $5 million
3-5 years
First Business Loan
3.2-4.5%
S $300,000
1-5 years
Startup Loan for Medical Doctors and Dentists
2.5-4.5%
S $500,000
1-5 years
Personal Loan for Business
6-9%
12 times the business' monthly income
1-5 years
Crowdfunding: Unsecured Loan
12-18%
S $200,000
3 -24
Crowdfunding: Invoice Factoring
1-1.5% (Monthly)
Up to 80% of invoice total value
30-120 days

Additionally here are all the banks and other financial institutions that provide excellent business loan products for startups:

Bank/Financial Institution
Start Up Loan Product
DBS Bank
SME Micro Loan
Maybank
SME Micro Loan
OCBC
First Business Loan
UOB
SME Micro Loan
Standard Chartered Bank
SME Micro Loan
RHB Bank
SME Micro Loan
IFS Capital
SME Micro Loan + Invoice Factoring
Orix Leasing
Start Up Loan for Medical Doctors and Dentists
Ethoz Capital
Start Up Loan for Medical Doctors and Dentists
Minterest
Business Term Loan + Invoice Factoring
Validus Capital
Invoice Factoring

How Can a Startup Business Loan Help Entrepreneurs?

Small business owners need just enough money to start operating. They use the money to pay for business licenses, employees, and other crucial items. Once they’ve overcome the jump-start business phase, a business loan can improve their cash flow, upgrade their equipment, facilities, and people, and expand their operations.

Below are three ways start-up loans are always sufficient for any business.

  • Improve Cash Flow

Taking on start-up financing options for any startup company in Singapore is a juggling act. You’ll need to make sure you gain enough profits to pay for employee salaries, maintenance, utilities, and the loan. Once you’ve finished your loan repayments and broke even with your profits, you’ll encounter a short period of unstable cash flow.

When this happens, you can use a startup business loan with a low-interest rate to stabilize your business cash flow. This extra cash will act as a safety net if you have emergency utility bills or logistical hiccups that can slow down your operations.

  • Invest in Better Equipment, Facilities, and Personnel

Your small company is performing exceptionally well. Unfortunately, its equipment is starting to wear out. You can use a start-up loan to finance new, longer-lasting, and better-performing equipment. Additionally, if you’re having some turnovers, additional cash can help you find new personnel too.

Furthermore, if your operations need you to have additional equipment that will not fit your existing facility, a startup loan can help you deal with the initial expenses of leasing a new headquarters or operating property.

  • Expand and Take Business To The Next Level

Seizing opportunities is difficult when you’re low on cash. With a startup loan from banks, you can make timely investments that ultimately lead to your business’ growth. Truthfully, many successful investors rely on savings and wealth they’ve accumulated to expand and improve their business portfolio.

For example, seizing a timed lease discount on a prime location leaves your business no time to accumulate enough just to avoid debts. With a microbusiness loan, you receive enough cash inclusive of interest you can manage. You can worry about saving enough to pay for your existing loan later.

business man with a marker and checkbox

Requirements and Eligibility To Have a Startup Business Loan

Singapore is one of the most startup-friendly countries in the world. However, despite easy access to small company financing, it lays down some strict requirements. In doing so, it safeguards the abuse of financial institutions and borrowers at the same time. Here are all the essential requirements and eligibility to use Singapore’s small company-friendly financial products and source of funds.

Eligibility

  • Registered Business in Singapore

Any company applying for a startup loan must be in Singapore’s registry. Make sure to have your company with full and proper registration. You can do so by following this instruction.
Once you’ve successfully had your brand registered, you can begin your operations. Take note that you’ll need to account and file your taxes efficiently as you’re now part of Singapore’s commercial roster.

  • Operational For More Than One Year

All financiers only accept startup loan applications from businesses that have at least one year of operational capacity. A one-year proof of concept from a startup makes it easy for financial institutions to gauge the performance, stability, and trust they can commit to the small company applying for financing.

A startup company proof of concept is indeed essential to get working capital. However, you can still use other credit sources, including credit cards and lines and personal loans, for your initial funding.

  • Minimum Annual Turnover of SGD $60,000

Banks are highly likely to approve the loan applications of commercial institutions that generate above SGD $60,000 yearly from profit after taxes, utilities, and other expenses. A startup brand that generates this amount shows that they have the essential knowledge and stability required to build their brand and take it to the next level.

Documents

Once you’ve chosen the loan provider you’ll work with, make sure you prepare all these documents. The sooner you can provide these documents, the shorter your application waiting period approval.

  • NRIC of Directors and Partners
  • Recent Business Profile data from Accounting and Corporate Regulatory
  • Recent income tax assessment notice (both business owners and company tax assessments)
  • Recent financial statement
  • Recent invoices and business contracts
  • Recent utility bills under the company’s name
  • Recent 6-month bank statements
  • All assets the company, directors, and partners own
  • Office or shop tenancy agreement

Business man accepting money

How to Find the Best Startup Business Loan in Singapore

It can be dizzying to find the best startup loan. You might find that you’ll need to decide between at least 30 financial products to find the best working capital for your growing company. Here are the three best ways to find the best financing in Singapore.

  • Shop Around

It’s a challenging task, but shopping around is the best way to find the financing available. Once you’ve found the perfect loan amount, consider the best interest rate per year and loan tenor that suits your cash flow.

  • There Are Many Alternatives to Banks

If you’re planning a startup to get out of debt, banks will usually limit or ultimately reject your loan application. In such a case, you can count on other financing institutions to help you. Trade unions and moneylenders provide credit to individuals they deem trustworthy.

  • Narrowing Down Your Moneylender Choices

While moneylenders might not have the deepest sources of funds or credit cards, they’re an excellent option for individuals who just need adequate funding for their expansion plans. However, make sure you’re working with lenders you can find in the Registry of Moneylenders.

If you’re having trouble comparing so many moneylenders, you can use Loan Advisor’s advanced search algorithms and filters to find the perfect startup loan. Learn more about how we can help you find the perfect financing here.

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