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How Long Is A Small Business Loan Term In Singapore?

How Long Is A Small Business Loan Term In Singapore?  

You’ll likely need additional cash as a small-and-medium-sized (SME) business owner in Singapore. As your business grows, you may need to meet a financial obligation, tap on opportunistic investments, or expand your business.

Whatever the reason, you can access an SME business loan with a reputable and trusted bank in Singapore.

There are over 20 banks and financial institutions in Singapore offering business loans. However, the rates and criteria vary from bank to bank.

This guide will explore everything you need to know about SME loans and answer the key question; how long is a business loan term in Singapore? Read on.

What Are Small SME Business Loans?

Small business loans, also known as SME business loans, include the various financing options provided to small and medium-sized businesses.

These loans have flexible terms and a repayment term of up to five years. In Singapore, banks and financial institutions usually lend standard business loans to businesses that have been operational for at least two years.

Before borrowing a business loan, there are several factors to consider and understanding the various types of small business loans available in Singapore.

Factors To Consider Before Borrowing A Business Loan in Singapore

Company Size

Your company size matters when taking out a business loan in Singapore, as it shows how much your business can make over a certain period.

It also allows you to estimate how much you can borrow and repay comfortably without affecting your business finances. Some lenders might even look at the number of workers to determine the amount to offer you.

Loan Tenure

Loan tenure means how long it will take you to repay the business loan. For the best qualification chances, it’s best to repay the business loan within the shortest period possible.

This will help you reduce the interest and the total amount you’ll repay. However, be careful and select a tenure that will allow you to repay the monthly installments without stressing your business finances.

Loan Amount

Ensure you only take the loan that will help you meet your goals and no more. You might be pulled in by the qualification amount and be tempted to borrow more.

Remember that your business loan should help take your business to the next level and not the next ten levels.

Loan Purpose

Always ask yourself the reason you’re borrowing a business loan in Singapore. Are you planning on purchasing new inventory or equipment to serve your clients better? Ensure you have a clear goal with the funds you’ll borrow.

How Long Is A Small Business Loan Term?

SME loans have flexible terms and a repayment term of up to five years. However, the rates and criteria vary from bank to bank.

In Singapore, banks and financial institutions usually lend standard business loans to businesses that have been operational for at least two years.

What Are The Business Loan Options In Singapore?

As previously mentioned, many different types of small business loans in Singapore cater to various business operational needs. Understanding the various business options available allows you to borrow a loan that best suits your business. Below is a quick overview of the common business loans available in Singapore.

SME Working Capital Loan (WCL)

The SME Working Capital Loan, WCL, is a government-assisted loan financing scheme overseen by the Enterprise Financing Scheme (EFS-WCL).

The government co-shares at least half the risk and provides loans to small businesses across all industries. This loan is aimed at helping SMEs access working capital for their enterprises.

Until 31 Mar 2023, the EFS-WCL has been improved to allow an increased borrowing cap of $500,000 from the previous $300,000.

Qualified businesses that have hit the WCL cap can opt for the OCBC Business Term Loan providing financing of up to $400,000 with a repayment period of five years. This loan can help your business cover the increasing costs and fund the day-to-day business operations or expansion.

Invoice Financing

Invoice Financing is a short-term loan guaranteed by your supplier or customer invoices.

Your business can convert up to 80% of its unpaid invoices into cash and receive instant access to cash flow with this loan. Besides, you’ll only pay the interest for the used amount.

Start-Up Business Loan

Also known as the Business First Loan, a Start-up business loan is aimed at providing funds to budding businesses six months up to two years into operations.

Such a loan comes with a reduced loan amount cap of $100,000. It is ideal for young businesses that require funding for their business capital.

Equipment And Machinery Loan

An equipment and Machinery loan is another type of fixed asset loan that you can borrow. The loan allows you to purchase new and used assets across various industries for upgrading and automation purposes.

This loan is also available under the EFS SME Fixed Assets scheme meaning the government co-shares at least half of the risks.

Your business could benefit more if the machinery or equipment you’re purchasing is sustainable assets contributing to a greener economy. These include buses, trucks, electric forklifts, and the like.

Moreover, local small businesses in the food manufacturing, food services, and retail sectors can get the Energy Efficiency Grant providing up to 70% funding support capped at $30,000 per business andthe loan to cover the purchase of energy-efficient appliances.

Commercial Property Loan

A commercial property loan is available to businesses looking to purchase new commercial properties like a shop or an office space. Both the SORA and fixed rate packages are also provided to small businesses.

In addition, if your business plans to refurbish or renovate its commercial property or be more energy-efficient, it can apply for a Green Commercial Property Loan.

Your commercial property must be either in a Platinum building or a BCA Green Mark Gold (Plus) to be eligible. Also, you can request an assessment on how to retrofit your property to contribute to a greener environment.

Trade Loan

The government also offers Trade Loan (TL) financing under the Enhanced Enterprise Financing Scheme.

As of 31 Mar 2023, the scheme has been extended to a maximum loan amount of $10 million from the previous $5 million limit. Businesses that qualifyfor a Trade Loan can use it to finance trade needs such as overseas working capital loans, stock/inventory financing, and as a bank guarantee for both overseas and domestic transactions capped at two years of tenure.

Sustainable Financing

If you’re a small business striving to go green, work on green projects, or operate in a sustainability sector, you can apply for the SME Sustainable Financing loan.

These activities include producing environmentally sustainable products, creating nature-based solutions, and growing environmentally sustainable agriculture, to name a few.

Getting sustainable SME financing in Singapore or a green loan doesn’t involve certifications. It can help improve your brand image and value.

Your small business can work with the OCBC team to attain its sustainable objectives. Small businesses can also tap into other state-assisted loan schemes such as the EFS-Green.

Why Might Your SME Business Loan Be Unsuccessful?

There are plenty of business loans available for small businesses in Singapore. Besides, the government has stepped in to ensure funding availability to more SMEs.

However, your SME business loan application may still be unsuccessful despite all these efforts.

You’ll usually realize this after waiting for two weeks after applying. Below are some factors that might affect the success of your business loan approval.

Credit Score

Business loan lenders can deny your loan application if you have a poor credit score. A low credit score shows lenders that you might be unable to repay the loan. Moreover, your personal credit score equally affects the results of a business loan application.

Business Ownership

The government-assisted financing is only available to businesses registered and present in the country. Singaporeans or private residents should own these businesses at least 30%.

Track Record

Most lenders prefer your business to be at least six months in operation and with a proven track record. Even if established, lenders might need proof of your annual revenues to assess your eligibility.

How and Where To Apply

You can get an SME business loan in Singapore from banks or licensed moneylenders and follow these simple steps to get started.

Step 1: Visit Your Lender’s SME Loans Page

Simply click “Apply Now” and use your SingPassMyInfo via the lender’s mobile app or website.The lender will retrieve your income and identity data from the verified information.

Step 2: Organise All the Required Documentation

The documents list includes:

Step 3: Select your Loan Tenure and Financing Amount

Enter the required loan amount and tenure and select the suitable plan. You can also enter the preferred account to receive the funds or details of another bank account.

Step 4: Get Your Loan Approved


As a business owner, financial needs arise occasionally, and you might require financing. In such an instance, you can take a business loan in Singapore to maintain your business’s cash flow or for expansion.

At CreditMaster, you can get the best business loan in Singapore with the best terms and fast disbursement.

Contact us today for any financial assistance you might need. We promise to exceed your expectations.