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FAQ

QUESTIONS & ANSWERS

SME Loan Singapore FAQs

Here are the commonly asked Singapore SME Loan questions
• Sole Proprietors / Partnerships / Private Limited Companies
• SME* registered and operating in Singapore
• Minimum 30% shareholding effectively held by Singaporeans / Singapore Permanent Residents
• Minimum 6 months of business operations
• Minimum turnover of S$70,000
• SME is defined as an enterprise with Group Sales turnover of not more than S$100mil or total Group Employment size of not exceeding 200

Business owners can approach any banks that offers SME loan facilities to submit an application.

There are close to 20 banks & financial institutions (FIs) providing small business loan to SMEs.

Different banks have varying credit criteria and risk appetite.

Do you know that some banks shun certain industries whereas other banks might welcome these same industries?

However, most SMEs are not aware which banks are suitable for their respective profile and could waste precious time speaking with banks that are not the right fit.

Aside from traditional mainstream banks, there are also multiple alternative financiers offering various financing options to SMEs.

Assisting SMEs with business financing remains our core business.

Due to our familiarity with the credit criteria of the various banks, we can help identify the most suitable banks for your company’s profile to ensure highest chances of commercial loan approval at the best terms.

Before you submit your loan application to a licensed money lender Singapore for your loans, it is important that you first find out if the agency you’ve chosen is a licensed money lender registered with Singapore’s Ministry of Law.

While there are many agencies claiming that they are licensed money lenders in Singapore, only a select few are registered with the Ministry and bound by the Moneylenders Act and rules. Those that aren’t are illegal money lenders that practice iIlegal money lending in Singapore and you should not deal with them for any reason.

Secondly, you should do due diligence and check out the reasonable interest rates a Singapore money lender is offering. This is to prevent yourself from accepting exorbitant rates that could pull you into further debt.

With CapitalGuru, one of the most trusted loan consultancy, you are assured of fair and low interest, strict adherence to the law and service with a smile. We understand our client’s needs and strive to offer a flexible repayment period suitable for the discerning borrower’s budget and repayment capabilities.

The maximum funding amount for small business loans varies across different banks and is contingent upon your company’s credit profile, including factors such as revenue size, industry, and cash flow position. Typically, most banks set their maximum financing amounts for SMEs within the range of $300,000 to $500,000. However, securing the maximum amount can be challenging unless the company has a near-perfect credit profile. If your primary bank is unable to meet your requested financing amount, you also have the option to simultaneously apply with other banks to enhance your chances of achieving the targeted financing amount.

The standard processing time for SME loan applications ranges from 2 to 4 weeks.

This duration is attributed to several factors:

  1. Unfamiliarity with Required Documents and Application Process: The time is extended as you may not be well-acquainted with the necessary documents and the intricacies of the application process.

  2. Communication and Refinement: Additional time is often spent in back-and-forth communication with the banker to ensure accuracy in the financing application.

  3. Approval and Disbursement: If approval is obtained after the application review, there is an additional waiting period of approximately 1 week for the funds to be disbursed. Thus, the overall turnaround time from application to fund reception is typically between 3 to 5 weeks.

For those seeking quicker alternatives, P2P crowdfunding platforms present a viable option, with processing times typically within 1 week being the norm. However, it’s essential to note that this expedited process may come at the expense of higher interest rates or fees compared to traditional banking options.

There are over 20 banks and financial institutions offering SME loans, each with varying interest rates determined by factors like the applicant’s credit grading and the loan amount. SME loan interest rates typically span from 3.6% to 7% simple rate per annum (equivalent to an Effective Interest Rate, EIR, of 7%-13%). It is advisable to conduct a thorough comparison across multiple banks to identify the most favorable financing deal. It’s important to note that the lowest quoted interest rate may not necessarily translate to the best financing offer for your business. It’s recommended to inquire about processing fees, annual fees (if applicable), and any additional charges that could impact your overall borrowing costs. For a comprehensive assessment, you might also consider enlisting the assistance of a loan broker. They can navigate through the diverse business loan products offered by various banks to pinpoint the lowest rates tailored to your company’s needs.
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