Best SME Loans for Small Businesses in Singapore 2020

Financing can be essential for the success of your small business. Our research team has analysed hundreds of data points and identified the best loan options for a variety of SMEs. Below, we feature the best business loans so you can compare their interest rates and fees, and ultimately choose the best product for your company.

Fastest Online Loans for SMEs & Best SME Loans for New Startups

SMEs typically need money as quickly as possible. Since traditional bank loans have more barriers for applying and receiving the money than online lenders, working capital loans, invoice financing, and lines of credit are preferable to many. These are our top loan picks based on speed and costs for small businesses.

Best for Large Loans: Funding Societies (FS Bolt & Invoicing)

Consider this if your small business seeks working capital loans and invoice financing

Max Financing S$3,000 - S$100,000
Fees 1%-4% (unsecured); 2%-5% (secured)
Interest Rate 1 - 4% p.m.
Eligibility 6 months operating history, Singaporean registered, and minimum 30% local shareholding.

Funding Societies' FS Bolt is the only loan that offers near-instant access to cash–within 24 hours— up to S$100,000. Because the interest rates range between 1%-4% p.m. and the processing fee is 1%-5%, this microloan is relatively inexpensive compared to other long-term loans in the market. While you can only borrow money for up to 12 months, this is a common feature for many SME loans.

Funding Societies also has a competitive invoice financing product. This also allows customers to withdraw 80% of their invoice(s) up to S$1,000,000. To be eligible, businesses only need to be in operation for at least 6 months, rendering Funding Societies a great choice for new businesses and startups. Companies are also not required to submit operational history or financial history, and there is no collateral needed or charges for early repayment. With over S$1.25 billion funded, the firm has a proven track record of helping SMEs.

  • No application fee, 2 minute application, 2 hours to receive decision
  • Receive cash within 24 hours
  • No early repayment fee
  • No collateral or operational/financial history required
  • Strong lending track record: more than S$1.25 billion funded
  • Read Our Full Review

Best Overall: Multiply Capital

Consider this if you're a new SME and want affordable invoice financing up to S$100,000

Max Financing S$50,000
Fees 1%
Interest Rate 0.6%-1.5% p.m.
Eligibility 6 months operating history; at least one Singporean PG

Multiply Capital's x-Invoice is great for invoice financing since it pays a cash advance on up to 90% of your invoice at a low monthly rate. On average, SMEs who apply for this product borrow around S$20,000 and receive it within 3 days. They only have to pay 0.7% per invoice, making it a cost-effective product for those seeking payments quickly. Because Multiply Capital's x-Invoice limit is S$100,000, companies who have higher invoices may find Funding Societies as a suitable alternative.

  • Loans up to S$50,000
  • New startups encouraged to apply with low monthly interest rates

Best Line of Credit: Aspire

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

Max Financing S$300,000
Fees 1 - 4% p.m.
Interest Rate 1% to 3.9% p.m.
Eligibility Corporate bank account (min 3-6 month history)

Aspire's Credit Limit is a great option for younger SMEs who have to make recurring payments or might have small, unanticipated costs to pay. Applications take only 5 minutes, and, once approved, a limit of S$300,000 is disbursed within 48 hours of acceptance. Aspire's Line of Credit also incentivizes new businesses to take advantage of their low interest rates, as it only requires businesses to be operating for 6 months before they're eligible to receive funds.

  • Interest rates from 1-3.9% per month
  • Discount of up to 100% on interest rate for early repayment

Best Online Term Loans for More Established SMEs (at least 1-2 years of operation)

The following online term loans are good for SMEs who require a larger amount of capital over a short period of time. These online lenders offer low interest rates, large tenors and flexible repayment options.

Cheapest Loans: FS Working Capital Loan (secured), Validus & Multiply Capital (unsecured)

Our Picks:
FS Working CapitalValidus CapitalMultiply Capital
Loan TypeBothUnsecuredUnsecured
Loan Tenor1-12 months1-12 months12 months
Loan AmountS$50,000-S$2,000,000S$250,000S$50,000
Interest RatesFrom 0.8% p.m. or 6.5% p.a.From 0.67% p.m. or 8.7% p.a.0.6-2.0%p.m.

Funding Societies working capital loans provide some of the cheapest secured loans, with interest rates between 6.5%-10% p.a. and a starter's fee of 1%. Since loans range from S$50,000 to S$2,000,000 for 12 months, this online lender is useful for businesses who want to fund both small and large projects. While the loan's disbursement is within five business days, which is more than other firms listed here, their maximum loan amount is one of the highest available at these rates.

Validus is a cost effective option for many businesses due to its competitive rates that start at 0.67% per month or 8.7% p.a. Additionally, the platform offers competitive cash disbursement, with 90% of approved businesses receiving funding within 48 hours. Loans range up to S$250,000 for 12 months, making Validus a good option for small to medium short-term loans.Aside from term loans, Validus also offers a variety of other financing options, including invoice financing, purchase order loans and working capital loans. Overall, Validus Capital can be a good choice for more established SMEs who want to use a straightforward platform to borrow money.

Multiply Capital's x-Loan is another option if your company is looking for a cheap loan. Multiply Capital has a 1% administrative fee (2%-3% lower than its competitors), and charges a low monthly interest rate of 0.6%-1.5%, which is comparably one of the lowest rates for invoice financing products. x-Loan is also great for new businesses, since companies as young as 6 months can apply and get a loan up to S$50,000 within 3 working days. Since they use their own capital to fund SME projects, Multiply Capital is ideal for those looking for direct B2B lending.

Largest Loans: Minterest & MoolahSense

Our Picks:
MoolahSense Business Loan
MoolahSense Business Loan
MinterestMoolahSense
Secured or UnsecuredUnsecuredSecured
Loan Tenor1-12 months6-24 months
Loan AmountAmount (range)S$50,000-S$3,000,000S$50,000-S$5,000,000
Interest Rates8%-18%p.a.N/A

Minterest is a great choice for SMEs looking for a large loan with relatively inexpensive fees. SMEs can apply for anywhere from S$10,000 to S$3 million with flexible repayment terms—something rarely seen on the market. In order to apply, you must have S$250,000 in annual turnover and at least 1 director who is a Singaporean PR/citizen. Due to its case-by-case eligibility assessments, Minterest has a more holistic application process. Once accepted, you will have to pay an administrative fee of 2%-6% on the principal amount and annual interest of 8%-18%. As the crowdfunding platform has raised over S$80 million in total for SMEs, it has proved its ability to help growing organizations.

MoolahSense offers the largest business loans—up to S$5 million—of any crowdfunding platform in Singapore. However, the application process is less simple compared to other lenders, as you'll have to pay an application fee of S$500 to S$750, have at least three years of operating experience and a minimum annual turnover of S$500,000. Moreover, you will have to pay a success fee (the fee charged when MoolahSense disburses the funds they've raised on your behalf) of 4%. Once accepted, you will receive funds within 5 business days for a period of 6-24 months. Despite this, with over S$50 million loaned, MoolahSense can be a great option for businesses who need large amounts of capital to undertake big projects.

Best Traditional Bank Loans

Consider this if your SME has a strong track record and is looking for a traditional bank loan

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

In general, banks are more selective than P2P platforms and have a longer processing time before funds are disbursed. Most banks in Singapore require 2-3 years of operational history and at least 30% of shareholders have to be Singaporean PRs or citizens for loans up to 5 years. For instance, DBS advertises attractive business loans with competitive interest rates (from 10.88%), maximum loan sizes (up to S$500,000) of up to 5 years. They also offer a variety of other products with higher-than-average maximum amounts to borrow. Taking a traditional banking loan or line of credit is ideal for companies who have a stable source of income or annual sales.

DBS Business Term LoanOCBC Business Term LoanStandard Chartered Installment LoanCiti Unsecured Business Loan
Loan TenorUp to 5 yearsUp to 5 years1-3 years4 years
Financing AmountS$500,000S$500,000S$70,000-S$S$300,00S$350,000
Interest Rate10.88% p.a.N/A11% p.a.N/A

Best Equity Financing

Our Picks:
FundedHerelFundnel
Loan TenorN/AN/A
Loan AmountS$1,000,000SN/A
Success Fee8%5%

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, don't qualify for loans from banks, and/or if the interest payments of a loan are cost prohibitive. For example, FundedHere is a good choice for companies less than a year old to raise up to S$1,000,000 in as little as 35 days. You'll pay a 6% platform fee and a 2% fee on the total equity raised. If you raise more than your target, you are allowed to keep the funds.

Fundnel, on the other hand, is better for SMEs looking for larger equity financing as it is uncapped. Their platform charges a smaller fee of 5% and also allows companies to keep more than their initial target. As the largest private investment platform, Fundnel is selective and only approves 10% of applicants. Due to its disbursement times of 60-90 days, it is advisable to use equity financing for companies who do not need the cash immediately.

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

Max Financing S$100,000; S$300,000; S$1,000,000; S$15,000,000
Fees Unknown
Interest Rate Unknown
Eligibility Registered and operating in Singapore and have at lest 30% local equity held directly or indirectly by Singaporen PRs.

Enterprise Singapore offers a variety of loans for marine and offshore engineering companies. These loans are harder to obtain, however, as only companies registered in Singapore with 30% local shareholding are eligible. Additionally, applicants must have 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 go up to S$100,000 and 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.
  • 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 are up to 8 years, while Factory Loans may last as long as 10 years.
  • SME Venture Loans are for innovative, high growth companies with the intent of expansion. Loan amounts are capped at S$5 million.

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 micro loans to meet short-term obligations or make a one-time purchase. Others require large financing or working capital loans to expand their business or 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, fees and the loan durations available. Ultimately, it is most important to choose the loan with the lowest total cost to your business, which means choosing a loan that has lower interest rates, a realistic tenor and low fees.

Methodology

We reviewed over 27 financial products to compare costs (fees, interest rates), requirements (collateral, revenue, assets) and other details (duration, disbursement, loan type) to find the best loan solutions for SMEs. After gathering the data, we were able to differentiate which loan would work best for SMEs who require different types of financing. When choosing a loan, you should consider the the different financing options before selecting the best option for you.

William Hofmann

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

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