Best SME Loans for Small Businesses 2019

Financing can be an essential factor for the success of your small business. Below, we feature the best SME loans in Singapore to allow you to compare features and rates in order to choose the best product for your business.

Best SME Credit Lines for Startups: Aspire Credit Limit

Consider this if your small business seeks flexible, short-term financing

Maximum Financing Amount S$150,000
Fees N/A
Interest Rate 1% to 3.9% per month
Eligibility Requirement N/A

Aspire's Credit Limit is a great option for startups and other SMEs that seek a flexible financing option. This online lender allows businesses to borrow their desired amount and charges rates from 1-3.9% per month only on the amount borrowed. Furthermore, it offers discounts of up to 60% on outstanding interest for early repayment. Aspire has also less strict eligibility requirements compared to other lenders, making it great for startups. With that said, its borrowing limit of S$150,000 is slightly lower than that of OCBC's.

Highlights

  • Interest rates from 1-3.9% per month
  • Significant discounts for early repayment
  • No financial history or operational requirements
  • No monthly fees

Fastest Online SME Loan: FS Bolt

Consider this if your SME requires immediate funds

Maximum Financing Amount S$100,000
Fees 3 - 5%
Interest Rate 0.6% - 6% per month
Eligibility Requirement N/A

Funding Societies' FS Bolt is the only loan available to Singaporean SMEs that offers access to cash nearly immediately. This loan is a great fit for brand new SMEs that need a quick loan and expect to be able to pay it off before incurring large interest charges. FS Bolt gives eligible borrowers access to up to S$100,000 within one business day. The quick application, which does not feature operational history or financial requirements, relieves SMEs of complex paperwork and gives them more time to focus on growing their business. Additionally, FS Bolt doesn't require collateral or charge a fee for early repayment. One downside of FS Bolt is that it charges a 5% service charge.

Highlights

  • No application fee, 2 minute application, 2 hours to receive decision
  • Receive cash within 24 hours
  • No early repayment fee

Best Invoice Financing Loan: Funding Societies

Consider this if your SME has significant expected invoices and short term cash needs

Maximum Financing Amount S$1,000,000
Fees 2 - 4%
Interest Rate 8% - 18% p.a.
Eligibility Requirement turnover of at least S$300,000; 1 year of operation

Among online lenders, Funding Societies offers the best invoice financing loan that we reviewed. Invoice financing allows companies waiting on payments from customers to borrow money against invoices from these payments. SMEs with large accounts receivable might consider a short term loan in the form of invoice financing. Funding Societies offers the largest invoice financing loans (up to S$1,000,000) with competitive interest rates range from 0.75 to 1.25% monthly. As one of the biggest online P2P crowdfunding platforms in Singapore, Funding Societies generally makes funds available within 1 to 2 days upon approval, which is faster than many other options (30+ days). Funding Societies has recently launched a new version of its Invoice Financing product, which accounts for the receivables’ aging history to provide extended payment terms on top of their invoice days. Interest is pro-rated, which means that SMEs that repay their loans early will save on interest costs for remaining invoice duration. Finally, the application is free, unlike other crowdfunding platforms that tend to charge around S$1,000 annually.

Highlights

  • Maximum principal: Up to 80% of invoice value or S$1 million
  • No application fee

Best Online P2P/Crowdfunded Business Loans

The 3 crowdfunding platforms below offer similar loan durations (up to 2-3 years), charge similar fees (3-5%), and feature similar business requirements (S$300,000 annual revenue, 1 - 2 years of operational history). That being said, depending on the specific characteristics of your SME, one platform might make more sense than the others.

Consider this if your company has 2 years of operating history and seeks an SME Loan with very low rates

Maximum Financing Amount S$2,000,000
Fees 1 - 2.5%
Interest Rate 8.7% - 26.8% p.a.
Eligibility Requirement 2 years operating history

Validus Capital is a great option for small businesses that seek a crowdfunded SME loan as it is able to leverage its institutional investor base in order to provide very competitive interest rates (starting at around 0.7% per month or 8.7% p.a.). Additionally, the platform rewards borrowers with strong loan repayment histories by offering these businesses preferred interest rates on their subsequent loans. These preferred rates tend to be 0.25% - 0.5% lower on a monthly basis (about 3% - 6% lower p.a.) than their normal rates. Validus also offers a variety of financing options, including invoice financing, purchase order loans and working capital loans. Additionally, the platform offers competitive cash disbursement, with 90% of approved businesses receiving funding within 48 hours, as well as a lower cash disbursal fee (1% to 2.5%) compared to other platforms.

However, Validus is not the best option for businesses with less than one year of operating history or businesses that require more than S$2,000,000. Its financing is also limited to 1 to 12 month terms, making it less appealing to businesses that seek long-term loans.

Highlights

  • Competitive interest rates and lower rates for borrowers with strong repayment history with Validus
  • Receive cash within 3 business days

Consider this if your SME is seeking a crowdfunding loan from a platform with a great track record

Maximum Financing Amount S$1,500,000
Fees 3 - 5%
Interest Rate 9% - 18% p.a.
Eligibility Requirement annual turnover S$300K, in business for at least 1 year

Funding Societies has the best performance track record of any crowdfunding platform in Singapore, with business loans totaling more than S$550 million (as of May 2019) and the lowest default rate (1%). It also offers the quickest cash disbursement upon loan approval (1 - 2 business days). Also, unlike the other lenders, Funding Societies does not charge an application fee for business loan applicants. However, it offers shorter loan durations than MoolahSense (up to 2 years) and CoAssets (up to 3 years). Finally, Funding Societies charges a 3% to 5% service fee, which is similar to those of other platforms.

Highlights

  • Over S$550 million in total business loans
  • Funding available as soon as 4 to 5 business days
MoolahSense Business Loan
MoolahSense Business Loan

Consider this if your SME is seeking large crowdfunding business loans

Maximum Financing Amount S$5,000,000+
Fees 4%
Interest Rate Unknown
Eligibility Requirement annual turnover of S$300,000; 1 year ACRA or trading for 2 years

MoolahSense offers the largest business loans, up to S$5 million+, of any crowdfunding platform in Singapore. Additionally, MoolahSense offers cash disbursement within 3 business days. It is also unique in that it offers both secured and unsecured business loans. MoolahSense does not have the same track record as Funding Societies, but it has loaned over S$50 million in more than 400 loans with a respectable default rate of 3.48%. It also charges a application fee of S$500 to S$750 and a success fee (4%) that is comparable to its competitors' fees of 3% to 5%.

Highlights

  • SME loans as large as S$5 million+
  • Receive cash within 3 business days

Consider this if your SME is seeking a crowdfunded business loan with a tenure of more than 2 years

Maximum Financing Amount S$3,000,000
Fees 3 - 5%
Interest Rate Unknown
Eligibility Requirement Unknown

CoAssets stands out because it offers the longest loan tenures (3 months - 3 years) of any crowdfunding platform in Singapore. Additionally, it allows SMEs to "upsize" their loans if their crowdfunding campaign receives more contributions than its original goal. While it doesn't offer the fastest cash disbursement (45 days) or largest loan size (S$3 million), its business loans give businesses greater flexibility given their longer durations. Finally, CoAssets charges similar service fee compared to its competitors of 3% to 5%.

Highlights

  • SME loans with durations of 3 - 36 months
  • Loans as large as S$3 million

Best Traditional Business Loans

In general, banks are more selective in loaning SMEs funds, in comparison to P2P platforms. This allows them to charge more competitive interest rates. According to our research and analysis, DBS and OCBC stand out among the top traditional small business lenders in Singapore.

Best Business Term Loan: DBS SME Loan

Consider this if your SME has a strong record and may be eligible for a traditional business loan

Maximum Financing Amount S$500,000
Fees > of S$500 or 2%
Interest Rate From 10.88% p.a.
Eligibility Requirement Unknown

DBS stands out as the largest bank in Singapore and a great small business lender. The bank advertises attractive business loans with competitive interest rates (from 10.88%), maximum loan sizes (up to S$500,000) and durations (up to 5 years). It is difficult to make specific comparisons between these loan offerings without understanding each business's circumstances; however, DBS's small business term loans appear to be the best available in Singapore.

Traditional Business Loan Comparison

Feature

DBS Business Term LoanOCBCUOB Business Bundle LoanStandard CharteredCiti
Maximum LoanS$500,000S$500,000S$550,000S$300,000S$350,000
Annual Interest Rate10.88%Unknown10.88%up to 11%Unknown
Maximum Duration5 years5 years5 years5 years3 years
Business RequirementUnknown2 years3 years3 years3 years
Revenue RequirementUnknownUnknownUnknownS$750,000S$750,000

Best Business Property Loan: DBS Business Property Loan

Consider this if your SME seeks financing and owns commercial property

Maximum Financing Amount 120% of property valuation
Fees N/A
Interest Rate Unknown
Eligibility Requirement Unknown

The DBS Business Property Loan is the best available commercial property loan. Property loans give borrowers the opportunity to receive loans based on the value of their property. SMEs may use their commercial property as a means for obtaining a loan to meet their need for funds. DBS allows businesses to obtain financing for up to 120% of their commercial property valuation. This is significantly higher than OCBC and UOB, which allow for financing up to 80%. Additionally, online applications and approval for the DBS Business Property Loan are faster than other banks - the process takes less than one business day.

Highlights

  • Financing up to 120% of property valuation
  • Application approval within 1 business day

Best Traditional Bank Asset Purchase Loan: DBS Local Enterprise Finance Scheme

Consider this if your SME requires a significant amount of asset purchasing financing over a longer period of time

Maximum Financing Amount S$15,000,000
Fees N/A
Interest Rate from 4.25% - 4.75% p.a.
Eligibility Requirement Registered and operating in Singapore

DBS's Local Enterprise Finance Scheme, which is administered by Enterprise Singapore, allows businesses to borrow up to S$15 million over 4 to 7 years. Given this, these loans are typically available for SMEs that have built a relatively sizable scale and operational history. Typically, banks offer lower interest rates than P2P but are more selective in the application process. Additionally, DBS does not charge a success fee, unlike KapitalBoost and other P2P platforms. Payments are made on a fixed monthly schedule.

To be eligible, SMEs must be incorporated in Singapore with at least 30% local shareholding. Additionally, the company's group must have annual sales of S$100 million or less, or employee fewer than 200 employees. Meeting the requirements of this government backed financing program does not guarantee application acceptance. Typically, traditional banks, like DBS, are more selective than P2P/Crowdfunding platforms.

Highlights

  • Loans up to S$15 million
  • No success fee (unlike many P2P platforms)
  • Plan with fixed monthly repayment schedule

Best Line of Credit for Established Businesses: OCBC Business Revolving Short Term Loan

Consider this if your SME needs flexible short term financing of up to S$200,000

Maximum Financing Amount S$200,000
Fees N/A
Interest Rate Unknown
Eligibility Requirement 2 years of operation

For SMEs with an operating history of over 2 years, OCBC's Revolving Short Term Loan is a great product for SMEs seeking flexible, short-term financing. Revolving credit allows businesses to draw up to an agreed amount anytime without a new application process to meet short-term cash needs, paying interest only on the loan amount outstanding at any given time. For SMEs with an operational history of at least two years, OCBC provides a loan of up to S$200,000 for 6 or 12 months. Compared to other types of loans, revolving credit facilities allow borrowers to save on interest payments for unused loaned funds. Also, revolving short term loans do not charge an early repayment fee for the loan, nor do they require collateral.

Highlights

  • No collateral required
  • No early repayment fee

Best Crowdfunding Asset Purchase Loan: KapitalBoost

Consider this if your SME requires quick financing for an asset purchase

Maximum Financing Amount S$150,000
Fees 3 - 4%
Interest Rate N/A - Cost-Plus Agreement
Eligibility Requirement Positive free cash flow last 12 months

KapitalBoost is unique in that it allows small or early stage companies to borrow up to S$150,000 through its short-term, crowdsourced asset purchase financing platform. KapitalBoost claims to offer a better approval rate and less paperwork compared to traditional banks.

KapitalBoost does not charge a fee for early repayment. However, the platform charges borrowers a 3 - 4% administrative fee, which is the industry standard.

Highlights

  • Receive cash within 30 days
  • Plan with fixed monthly repayment schedule

Best Equity Financing

Equity financing consists of a business selling shares of its ownership to investors in order to meet financing needs. SMEs might decide to sell shares of equity if they don't have a sufficient operating history and don't qualify for loans from banks or if the interest payments of a loan are cost prohibitive.

Small, Early Stage Equity: FundedHere

Consider this if your SME seeks quick equity funding to grow

Maximum Financing Amount S$1,000,000
Fees 6% (in terms of cash) + 2% (in terms of equity)
Interest Rate Unknown
Eligibility Requirement 3 months of incorporation, S$50,000 paid up capital

FundedHere allows small, early stage companies to sell their equity to raise funds up to S$1 million in as few as 35 days. The platform facilitates meetings for SMEs and the investor community. Unlike some platforms, FundedHere allows SMEs receiving more than their fundraising goal to choose to "upsize" their campaign and accept extra funding. Additionally, SMEs fundraising through FundedHere are given free access to advice from experts and investors. The platform charges fees of 6% of cash and 2% in terms of equity.

Highlights

  • Funding quicker than banks and other crowdfunding platforms: as soon as 35 days
  • Option to upsize if campaign receives more than 100% funding
  • Facilitated meetings with investor community

Early to Late Stage Equity: Fundnel

Consider this if your SME or startup of any stage seeks a significant amount of equity funding

Maximum Financing Amount N/A
Fees 5%
Interest Rate Unknown
Eligibility Requirement Unknown

Fundnel is a great option for SMEs considering large equity-based financing deals. The crowdfunding platform allows SMEs to raise money, via convertible bonds, bond/debt structure, revenue sharing, or equity. The platform has an impressive track record, having completed deals as large as $20 million (USD) and totalling more than $100 million (USD). Given these deal sizes, Fundnel tends to have a very selective screening process for companies seeking funding: only 10% of applicant companies are given the opportunity to use Fundnel and only 3% of applicants eventually receive funding.

Fundnel charges a smaller fee (5%) than FundedHere and also allows SMEs to "upsize" their equity financing if they receive more than their fundraising goal.

Highlights

  • Lower success fee (5%) than FundedHere
  • $100MM USD deals completed
  • Selective screening process
  • Upsize available
  • Large investor network: 7,000+ investors
  • Funding available for Singaporean and International companies
  • Read Our Full Review

Government-Backed Loans

Singapore's government has committed S$2 billion for loans specifically designed for SMEs. These loans are offered by financial institutions with the government accepting 50% of the default risk. For these loans, the government sets the eligibility requirements and the banks set the interest rates.

Consider this if you are interested in micro loans, equipment and factory loans, or venture loans for your SME

Maximum Financing Amount S$100,000; S$300,000; S$1,000,000; S$15,000,000
Fees Unknown
Interest Rate Unknown
Eligibility Requirement Registered and operating in Singapore

Enterprise Singapore offers micro loans, working capital loans, equipment and factory loans, venture loans, loan insurance schemes, and bridging loan for marine and offshore engineering companies. Only companies registered in Singapore with 30% local shareholding are eligible. Additionally, most of these are typically designed for relatively sizable SMEs since most loans require that applicants have Group annual sales of S$100m or less or group employment size of 200 or fewer.

Companies with 10 or fewer employees or sales of less than S$1 million are eligible for SME Micro Loans. These loans, of up to S$100,000, are designed to fund daily operations and equipment upgrades for growing SMEs. To encourage lending to new SMEs, Enterprise Singapore takes on a greater risk share for companies younger than three years old.

The SME Working Capital Loan allows companies to access loans of up to S$300,000 in unsecured working capital over up to 5 years. These loans are designed to give SMEs cash for daily operations.

The SME Equipment and Factory Loans allow SMEs to borrow up to S$15 million for upgrading factory and equipment or purchasing JTC Corporation or Housing & Development Board factory and business premises. Equipment loans may last up to 8 years and Factory Loans may last as long as 10 years.

SME Venture Loans are specifically designed for innovative, high growth companies with the intent of expansion. Loan amounts are capped at S$5 million.

Summary Table

Here's a summary table of all of the SME loans featured here.

LenderHighlights
Aspire
  • Most competitive revolving credit line for startups
  • Interest rates from 1-3.9% per month, with discounts for early repayment
  • Minimal eligibility requirements
DBS - Business Term Loan
  • Up to S$500K, 5 Years
  • Interest from 10.88% p.a.
Funding Societies
  • Invoice Financing up to S$500K
  • Strong performance track record
  • Funding available as soon as 1 to 2 business days
  • Free Application
MoolahSense
  • Largest crowdfunding SME loans (S$5 million+)
  • Cash available within 3 business days
CoAssets
  • Longest crowdfunding SME loans (3 months - 3 years)
  • Loans up to S$3 million
KapitalBoost Asset Purchase Financing
  • Receive cash within 30 days
  • Plan with fixed monthly repayment schedule
  • Administrative Fee: 3 - 4%
  • Required Security/Collateral: 150%
FundedHere
  • Funding quicker than banks and other crowdfunding platforms: as soon as 35 days
  • Option to upsize if campaign receives more than 100% funding
  • Facilitated meetings with investor community
Fundnel
  • Lower success fee (5%) than FundedHere
  • $100MM USD deals completed
  • Upsize available
  • Large investor network: 7,000+ investors
FS Bolt
  • Receive cash within 1 business day
  • No collateral or business history required
  • No early repayment fee
OCBC - Business Revolving Short Term Loan
  • No collateral required
  • No early repayment fee
DBS - Business Property Loan
  • Financing up to 120% of property valuation
  • Application approval within 1 business day
DBS - Local Enterprise Finance Scheme
  • Loans up to S$15 million
  • No success fee (unlike KapitalBoost and other P2P platforms)
  • Plan with fixed monthly repayment schedule

How to Compare SME Loans

The first step in comparing SME loans is choosing the loan that matches your business's needs. For example, many SMEs require short-term financing to meet their short-term obligations or make a one-time purchase. Others require large amounts of financing to expand their business or to purchase an expensive asset, such as equipment or real estate. Once you are able to decide on the type of loan that you need, based on the purpose of the funding, you will need to compare interest rates and fees of lenders. Ultimately, it is most important to choose the loan with the lowest total cost to your business. If you are are seeking crowdfunding platforms as an investor, see our Best P2P Crowdfunding Platforms for Investors page.

Methodology

We conducted our review based on information available online. We reviewed financial products from the following companies below. We gathered loan data that would be most relevant to potential borrowers: costs (fees, interest rates), requirements (collateral, revenue, assets) and other details (duration, disbursement, loan type).

AspireMoolahSenseFunding SocietiesCrowdGenieCoAssets
New UnionFundedhereCapital MatchCrowdoInvestacrowd
KapitalBoostFundnelDBSOCBCUOB
Ethoz Capital LtdHong Leong Finance LtdIFS Capital LtdMalayan Banking BerhadORIX Leasing Singapore Ltd
Oversea-Chinese Banking Corporation LtdRHB Bank BerhadSing Investments & Finance LtdSingapura Finance LtdValidus Capital
William Hofmann

William is a Senior Research Analyst at ValueChampion Singapore, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.

Comments and Questions