Business Loan Singapore - What Types of Loans Are Available?

If you're planning to start a new business, or expand your existing business, you might need a Business Loan Singapore. These types of loans are meant to fill gaps in working capital, finance inventory purchases, and commercial property rental. Various financial institutions offer different types of business loans. Depending on your company's needs, you may choose from a traditional bank loan, an equipment and machinery loan, or an asset-backed loan.

A typical business loan in Singapore ranges from S$100,000 to S$1 million, depending on the size of your business. The loan's interest rate can vary from 4% to 20%. This rate depends on the nature of the loan and the length of its repayment period. In general, longer-term and specific-use loans have lower interest rates than unsecured loans, as they carry less risk and longer repayment periods. However, securing a business loan can be difficult, and getting a business loan with no money is an unheard-of scenario.

One type of loan is a temporary bridging loan. In this type of loan, the financial institution opens a joint bank account with the SME, directing all credit card transactions to that account and receiving monthly repayments automatically. Should there be any excess cash left over at the end of the loan term, the financial institution will hand it over to the SME. The repayment period, however, can last anywhere from six to nine months.

A government-backed business loan is the SME Working Capital Loan. This loan is available to local SMEs and requires that the business is Singapore-registered. Additionally, 30% ownership must be Singapore-based. The government plans to further improve this program in 2020. Alternatively, it partners with banks in Singapore and offers up to SGD1M to companies that qualify. The repayment term, meanwhile, ranges from one to five years.

To qualify for a SME business loan, your company must have been registered in Singapore and have 30% local shareholding. The longer a company has been operating, the more stable it is. Most banks consider a business stable after two years of operation. Banks like OCBC and DBS are more lenient in this regard. A high annual turnover is also an important factor, as it shows stability. If you're planning to start a new business in Singapore, be prepared to face many challenges. The best way to get a business loan in Singapore is to find a financial institution that supports your company's growth. You'll be amazed at how much the small business community in Singapore can do for you.

There are many sources of funding available to SME entrepreneurs in Singapore. From banks to crowdfunding sites, you can find a business loan that suits your needs. There's no better time than the present to start your business in Singapore. But keep in mind that all business loans are not the same. Make sure to read the fine print and get the right one for your business. You can also use a loan comparison website to see how many other lenders offer loans.