While SMEs and startups play vital roles in the economy of Singapore, the business landscape is supported by a wide variety of startup and SME funding choices.
As of 2025, about 27% of Singaporean businesses have sought financing like business loans in the past year, primarily to expand operations locally, develop their workforce, and introduce new products or services, underscoring the strong demand for accessible and flexible funding solutions among SMEs.
In the following article, we will be providing a list of the most common loans for businesses in Singapore in 2025, including the loans supported by the government, and offered by financing organizations, as well as the tips and pros & cons of applying the loans.
The SME Working Capital Loan aims to help SMEs manage operational cash flow needs, such as paying suppliers and staff. The applicant could receive a loan amount that goes up to S$500,000, while the repayment terms could be up to 5 years.
The SME Fixed Assets Loan is often used to help companies to buy fixed assets like equipment. While it supports business capability upgrades with SME loan amounts up to S$30 million, its repayment terms could be up to 15 years.
The Business Term Loan is a lump sum business loan, usually offered by banks, repaid over a fixed period, which is typically 1 to 5 years. The interest rates and total loan amounts vary as they are different between different banks. The companies use it for long-term investments or expansion in their business growth plan.
It is a short-term business loan to help businesses bridge cash flow gaps, often with the help of the government to share risk. The business loan amounts can be up to S$20 million, with flexible repayment tenures up to 5 years.
It is tailored for startups and high-growth companies. It complements venture capital funding, providing capital without equity dilution, while it is suitable for businesses lacking collateral or stable cash flow.
The Trade Loan supports businesses engaged in trading activities, such as importing and exporting, by financing working capital needs related to trade transactions, usually covering inventory or stock financing, and pre-delivery working capital. The loan limit has been increased from S$5 million to S$10 million by the government to support larger trade deals.
The EFS - Project Loan is designed to finance the fulfilment of overseas projects undertaken by Singapore-based companies. It is part of the Enterprise Financing Scheme and benefits from government risk-sharing to facilitate lending. It helps businesses access capital to execute international contracts or projects, supporting their plans to further expand into the global market. It is typically used for project-specific costs and enables companies to manage cash flow during project execution.
The Mergers & Acquisition Loan, aka M&A Loan, provides financing for the acquisition of target enterprises, including asset acquisitions, with the goal of business growth and internationalisation. It supports companies looking to expand their market presence through mergers or acquisitions, enabling them to secure strategic assets or businesses.
OCBC offers a business loan tailored for young businesses operating between 6 months and 2 years. While it is supported by the government, it offers quick access to financing with minimal paperwork, enabling the businesses to be financed up to S$100,000, and repayment terms up to 4 years.
Besides the OCBC Business First Loan, OCBC also provides a traditional term SME loan for established small- and medium-sized companies, offering lump sum financing for business expansion or investment with flexible repayment terms, typically up to 5 years. The loan amounts and interest rates of the loan depends on the applicant's credit assessment and business profile.
Except for OCBC, UOB also provides loans for businesses to apply in Singapore. The UOB BizMoney Loan is a SME and startup loan for companies that operate for at least 1 year, providing up to S$350,000 for working capital needs. It features fast approval, repayment terms of 1-5 years, and an annual fee of S$500.
UOB also offers a short-term SME loan supported by the government to help SMEs bridge cash flow gaps, with loan amounts up to S$1 million and repayment terms up to 5 years. Businesses, such as PPP Coffee, used to benefit from this loan as they sustained their businesses in the pandemic crisis period.
The UOB SME Working Capital Loan is under the ESG's Enterprise Financing Scheme, supporting daily operational cash flow needs for small businesses, with loan amounts up to S$500,000. The risk share varies from 50% to 70% depending on the age of the companies.
DBS is offering a lump sum loan for business expansion or capital expenditure, with flexible repayment tenures typically ranging from 1 to 5 years. Loan amounts and interest rates depend on the borrower’s creditworthiness and business needs.
Different from the DBS Business Term Loan, the SME Working Capital Loan is designed to finance working capital requirements, helping SMEs maintain smooth operations. The loan amounts can go up to S$500,000 with repayment terms up to 5 years, often with favorable interest rates due to risk-sharing.
The SME Micro Loan is a smaller-scale loan aimed at startups and micro SMEs, providing quick access to funds for immediate business needs. It typically offers lower loan amounts with shorter repayment periods, which is more suitable for very small businesses.
The Standard Chartered Business Instalment Loan is a fixed-term loan offering lump sum financing for business growth or working capital, repayable in monthly instalments. Similar with other loans offered by the banks, the interest rates and loan amounts vary based on credit assessment and business profile.
Telling by its name, the Standard Chartered SME Working Capital Loan is a loan designed to support daily operational expenses. The repayment options are flexible, while the lending to SMEs is encouraged as it is supported by the government to share the risk.
This loan is also backed by the government to enhance the banks' confidence in financing SMEs in Singapore. The temporary bridging loan is a short-term loan that helps SMEs manage cash flow interruptions, with the key feature of quick access to funds with repayment terms up to 5 years.
The CIMB BizGrow Loan aims at SMEs for business expansion and working capital needs, offering competitive interest rates and flexible repayment terms. It is collateral-free, while it helps SMEs to support daily expenditures such as the rent and payrolls. Its primary purpose is to help businesses to grow to greater heights, no matter whether it is within Singapore or abroad.
The Grab Finance SME Loan is available digitally, targeting the SMEs and merchants on the Grab platforms. The loans leverage Grab’s data for credit assessment.
A government-backed loan under Enterprise Singapore’s EFS, providing risk-shared working capital financing up to S$500,000 with repayment terms up to 5 years. It helps SMEs manage operational expenses with more accessible credit terms.
Most banks and government-supported business or SME loan schemes require the business to have a certain level of local shareholding, typically around 30%. The local shareholding has to be held by Singapore Citizens or Permanent Residents.
In most cases, the business must be registered and operating in Singapore, typically under ACRA (Accounting and Corporate Regulatory Authority). For startups, a minimum operational history of 6 months is often required, while more established SMEs may need 1-2 years of operating history depending on the business loan type and lender.
The lenders often check the financial health to evaluate if they should lend the businesses the loan. To check the financial performance, they will look into numbers such as annual sales turnover, revenue, cash flow, and credit score etc. Strong financial statements and a good credit history improve the chances of business loan approval and better interest rates.
Some business loans require the business to meet minimum employment size or group turnover thresholds. This helps lenders measure the scale and stability of the business.
Providing complete documentation such as financial statements, tax returns, bank statements, identification documents, and a clear business plan demonstrating growth strategy and business loan usage is crucial. A well-prepared business plan especially helps startups convince lenders of their repayment ability.
As mentioned above, the business must be registered and operating in Singapore, usually under ACRA. It must have a valid business registration number for the loan application. Besides, company registration documents that could help show the ownership structure and shareholder details would be helpful, as there might be local shareholding requirements for some loans' application.
Most lenders require a minimum operating period depending on the business loan type. For instance, established SME loans often require 2+ years of operation, while some startup loans accept 6 months.
Applicants need to submit financial documents such as financial statements, bank statements, tax returns. It helps the lenders to know more about the financial status of the company, and hence evaluate the trustworthiness of the borrower and determines more details of the financing offer.
Identification Documents are usually compulsory. For example, the copies of NRIC or passports of business owners, directors, and partners, as well as company constitutional documents, board resolutions, and proof of business address would be required during the application process.
Some lenders may request a brief write-up on the company’s business nature, management team, customer base, and how the business loan will be used to support growth or operations. It helps them to evaluate whether the borrower has a plan for the business's growth in the future, and whether they would repay at their full ability.
Disclosure of any existing business loans or financing facilities with other banks, including outstanding amounts and repayment history. It would help the lender know more about your financing status, hence evaluate the ability or creditability of the business.
Some lenders might have other special requirements, such as site visits to verify business premises or guarantors’ details. It is highly suggested to consult for more details before actually applying for the loan.
The first step is to check the eligibility criteria of the loan. The most common ones are business registration in Singapore, minimum operational history, and financial health indicators like revenue and credit score. Make sure that you have a clear understanding of the requirements and documentation needs from different lenders.
Draft a detailed business plan outlining your growth strategy, current operations, revenue streams, and how the business loan will be used. This helps lenders assess your business viability and repayment ability.
Make sure that you have gathered all required documents before submitting the application. For your reference, here are some common documents that might be required in your applications:
Decide on the loan quantum and repayment period that suit your business needs, distinguishing between short-term working capital and long-term investment loans.
Applications can be submitted online or in person depending on the lender. Many banks integrate digital services like MyInfo Business to auto-fill company details, speeding up the process. You may need to engage with loan officers for additional information or clarifications.
After submitting the application, you will need to wait for the approval. If your application is successful, you will receive a letter of offer about the loan details, including loan amount, interest rate, repayment terms, and fees. Please be careful when you review each item on the letter of offer before acceptance.
To improve your chances of business loan approval and ensure a smooth application process, maintain a good credit score and have a clear understanding of your cash flow and repayment capacity. It’s important to clarify whether the business loan is intended for short-term operational expenses or long-term investments so you can select the most suitable loan product. Additionally, be prepared for possible follow-ups or requests for extra documentation during the business loan processing period.
Although small business loans are common in Singapore to help SMEs or startups get capital for growth and operations, there are also some limitations you should be aware of:
Banks and government schemes have requirements on local shareholding, minimum operating history, and satisfactory financials, which can be challenging for very new or foreign-owned startups.
Many loans require collateral or personal guarantees, putting business or personal assets at risk if repayments are missed.
Fixed repayment schedules mean businesses must maintain steady cash flow to meet monthly instalments, which can strain finances during downturns.
Startups or SMEs without collateral may face higher interest rates, increasing the overall cost of borrowing.
Processing fees, annual fees, and penalties for late or early repayment can add to the loan cost.
Repayments are a fixed percentage of monthly revenue, so payments flexibly adjust based on business performance. If revenue dips, repayments decrease accordingly, easing cash flow pressure. This model aligns repayment obligations with actual business income, reducing financial strain during slower periods.
Fixed monthly repayments are required regardless of revenue fluctuations, which can strain cash flow during slow periods or seasonal downturns. Businesses must meet these fixed instalments even if income drops, potentially causing cash flow challenges.
There is no equity dilution occurring in revenue-based financing. In other words, it allows business owners to retain full ownership and control of their company without giving up shares or decision-making power.
While loans do not dilute equity, they often require collateral or personal guarantees, which can put personal or business assets at risk if repayments are missed.
Typically does not require collateral or personal guarantees, reducing risk to personal assets. The financing is secured against future revenues rather than physical assets.
Often require collateral or personal guarantees, increasing personal risk if the business defaults on repayments.
Revenue-based financing methods offer faster funding timelines with minimal paperwork and automated revenue tracking. It often finishes processing within days or a week,
Usually involve longer approval times for extensive documentation, credit checks. It typically takes several weeks to process the application.
Repayment ends once a pre-agreed multiple of the loan amount is repaid (commonly 1.3x–1.5x), with no fixed interest rate. This makes the total cost predictable and tied directly to business performance.
Carry fixed or variable interest rates, with additional fees and penalties for late or early repayment, which can increase the overall borrowing cost.
While traditional SME loans are playing crucial roles in financing businesses in Singapore for future growth and operation, they sometimes have their limitations, such as strict eligibility criteria, collateral requirements, lengthy approval processes, and rigid repayment structures. They can create significant barriers, particularly for fast-growing, digitally-native, or asset-light businesses.
Recognizing these challenges, innovative financing solutions like Choco Up's Upstart revenue-based financing have emerged. It offers a fundamentally different approach that is aligned with modern business cycles of the SMEs, making it a more flexible solution for the small businesses in Singapore. Contact us for more details.
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