How Business Owners and Entrepreneurs Can Raise Capital in Singapore

SME owners and entrepreneurs seeking financing opportunities in Singapore, here are a few different methods you can raise business capital.

Priscilla Lee

by Priscilla Lee on Apr 4, 2024

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The lack of capital and the high cost of setting up a business in Singapore have often been cited as top hurdles to entrepreneurship in Singapore. However, that should never be the reason to hold back your grand business idea that may revolutionise the world. Whether you are financing a small and medium-sized enterprise (SME) in Singapore or just need more business capital to invest in an innovative technology, there are many funding options that can help you achieve your goals.

Here are a few different methods that can help you raise the capital you need, no matter the scale of your entrepreneurial aspirations.

Related: Resource Page For SMEs and Startups in Singapore

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1. Angel Investors

Angel investors are individuals who can provide business financing to Singapore SMEs or companies in their early stage in exchange for ownership equity. They are typically high-net-worth individuals or entrepreneurs who have a keen interest in promoting entrepreneurship in Singapore. Reportedly, Singapore is home to more than 100 angel investors who invested S$30,000 to S$500,000 in promising start-ups.

The benefits of partnering up with angel investors go beyond monetary support. These investors bring with them valuable expertise, industry connections and mentorship. Their firsthand experience as entrepreneurs can offer guidance based on their own successes and ensure the companies they are investing will enjoy exponential growth.

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2. Bootstrapping

This is the most primitive method of starting a business using personal funds. You will rely on as little external financing as possible while you take full control to grow your Singapore SME business. When entrepreneurs choose to bootstrap their business, they do not leverage corporate loans but rely on their own savings, credit cards, or funds from friends and family.

Bootstrapping is a common approach for early-stage startups and SMEs when external funding is limited or when entrepreneurs prefer to maintain full ownership. However, it is good to note that limited resources can sometimes slow down expansion possibilities and growth potential for a business.

3. Business Incubators and Accelerators

The primary goal of business incubators is to help SMEs overcome challenges and increase their chances of survival and growth during the initial stages of development. When you include an incubator as a funding system for your entrepreneurship goal in Singapore, you are essentially seeking the help of an organisation to provide comprehensive support such as physical workspace office facilities, equipment, and infrastructure to bring down the cost of setting up a business.

Business accelerators, on the other hand, are programmes that focus on upscaling businesses that have already passed the initial stages. They provide intense, time-limited support and guidance to selected recipients that must accomplish a defined set of milestones within a period of time. Accelerators usually conclude with a demo day or investor pitch event, where startups present their progress and seek further investment opportunities.

4. Business Loans

Unlike working with angel investors or venture capitalists who may ask for a percentage of your business equity, corporate business loans in Singapore offer SME financing without such a requirement. Startups and businesses can borrow a specific amount of money as long as they meet eligibility criteria and agree to pay off the loan sum within a fixed period and interest rates.

There are a variety of business loans in Singapore that cater to different objectives. Working capital loans, equipment financing loans, start-up loans, SME loans and invoice financing loans are some common options available from lending institutions. Interest rates can range between 1% and 15%.

Related: How to Get the Best Loan for Your Small Business

5. Crowdfunding

Crowdfunding is a method of raising funds for a business idea or venture by raising funds through small contributions from a large number of individuals. This is usually done via the internet. It is a form of alternative SME financing that is gaining popularity in Singapore and around the world because of its ability to access fresh funds without relying on traditional financial institutions for corporate loans.

The different models of crowdfunding include:

  • Donation-based crowdfunding where individuals make contributions without expecting financial returns
  • Reward-based crowdfunding which offer backers non-monetary rewards instead of financial returns
  • Equity crowdfunding which allows contributors to become partial owners of the business
  • Debt crowdfunding, which is similar to peer-to-peer (P2P) lending, is where money pledged by backers must be repaid with interest within a fixed period of time

6. Government Grants

The Singapore government offers various grants and schemes to support entrepreneurship and ensure businesses receive continual assistance at any stages of development. These grants aim to promote innovation, productivity, globalisation and growth across different industries.

Two of the most popular ones for startups are Startup SG Founder which provides mentorship and startup capital grant of S$50,000 to first-time entrepreneurs and Startup SG Tech which supports Proof-of-Concept (POC) and Proof-of-Value (POV) for commercialisation of innovative technologies. Refer to GoBusiness for a comprehensive list of government grants.

Related: Entrepreneurs’ Guide to SME Grants in Singapore

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7. Peer-to-Peer Lending

Peer-to-peer (P2P) lending is an online marketplace or platform for lending that startups can utilise to connect with large pools of individual lenders.

Borrowers can potentially obtain loans at more competitive interest rates and terms than traditional banking institutions. Lenders, on the other hand, can be exposed to more opportunities to earn interest by directly investing in the startups, diversifying their investment portfolios and potentially earning higher returns compared to traditional savings or investment options.

If this form of funding option piques your interest, check out popular P2P lending sites such as Brdge Tech (SeedIn), Capital Match, Capital Springboard, Crowd Genie, Crowdo, FundedHere, Funding Societies, Fundnel, Investacrowd, KapitalBoost, and Minterest.


Singapore is a country that promotes entrepreneurship and there is no shortage of funding options for those who want to turn their aspirations into real businesses. Do not let your innovative ideas go to waste just because of the lack of capital. There are many corporate loans in Singapore that can help you to fulfil your enterprising vision.

Refer to our Best SME loans for small businesses in Singapore for more information.

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