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Best SME Loans in Singapore for 2024

6 July 2023

, posted by 

Aldean Moch Rafli


A SME Loan is a wonderful tool to help your business grow: you gain access to the working capital you need while having control over the amount of time you have to repay the loan. With Singapore’s economic growth projected to slow down in 2023, it is paramount that businesses, especially SMEs, make full use of whatever tools available to stay afloat and even thrive in this difficult yet opportunistic time. 

What are SME Loans?

SME loans are a subset of business loans meant for Small and Medium-sized Enterprises (SMEs) for business purposes. Compared to personal loans, SME loans have higher loan limits and a more stringent process to check your business’s validity. This also means that SME loans take longer than personal loans to process. Compared to traditional business loans, SME loans have a lower loan limit, and have shorter processing times to suit the agile nature of SMEs.

Types of loans available in Singapore

1. Business Loan

The basic business loan is an unsecured loan where you do not need to offer your assets as collateral and have up to 5 years to pay off the loan. Major banks such as DBS, OCBC and UOB all offer this standard loan to local businesses, but they may have different eligibility requirements.

2. SME Working Capital Loan

Jointly offered by the Singapore government and local banks, this special business loan offers up to $1 million per borrower to local SMEs (200 employees or less), to be repaid within 5 years. This loan is available to Singapore-registered SMEs that are at least 30% owned by Singaporeans/PRs.

3. Startup Business Loan

This loan is designed to help you launch your business or startup. With a smaller loan limit as compared to the regular business loan, this loan is easier to attain, with more accessible loan eligibility criteria such as shorter operation duration and less stringent financial history requirements.

When should you get a loan?

Taking up a business loan provides you with working capital that can help your business achieve many wonderful things. However, it is important to carefully consider the reasons for taking out a loan and to make sure that your business can afford the loan payments before taking up this responsibility. A good rule of thumb is to only take out a loan if it will help the business grow and be more profitable in the long run. 

1. Do you have a tried and tested business model?

Your chances of successfully growing your business is much higher if you already have the secret sauce. If your business is still in its early stages of discovery, taking up a loan haphazardly will only cause you to rake up unnecessary interest costs, which can be detrimental to a new business. Consider taking up a loan only after building a business model that works, and you need help expanding your business operations!

2. Do you have an expansion plan?

When you’ve solved 99 problems and are left with only one – access to working capital, then it might be the perfect time to take up a loan. If you’ve already thought through a plan of action to expand your business, taking up a loan may be the push you need to get your plan up and running. Don’t wait to save up and lose precious time and momentum before taking action.

3. Are you short staffed and facing issues keeping up with business?

First of all, congratulations! This means your business model works, and that you’re doing well! However, don’t let your success weigh you down. When it’s time to expand your business, don’t wait to save up before taking action. Consider taking up a loan to gain access to the resources and manpower you need to capture your future profits today!

4. Are you short on cash flow?

Having a healthy balance sheet is key to any successful business, especially for SMEs whose financial health helps to rake in big investment dollars! Having easy access to cash also allows for your business to seize opportunities when they arise, or even earn passive income with an interest-paying business account (a discussion for another article).

Now, if you’ve answered yes to all three questions above, it’s time to start shopping for a loan that best suits your business. Here’s what you should look out for when choosing a loan.

SME Loans: What to consider?

1. Interest rate

With great power comes great responsibility. If not managed properly, the interest accrued on your loan can very much harm your business more than the benefits brought about by the loan. With business loan interests hovering around 10% a year, this means that the monthly amount you pay back gets higher each day. Even on days off, your business is losing money servicing the loan, which is eating into your profits. Hence, whenever possible, choose the option with the lowest interest.

2. Maximum loan amount

Growing your business is, well, serious business! Don’t settle for less than what you need and end up being forced to cut corners. The hard truth is that without enough working capital, the only way to make your plans work is to switch to lower-quality alternative options, and that can be detrimental to your business with today’s competitive landscapes; produce a lower quality product than your competitors and watch your marketshare slide. Make sure the loan option that you choose can give you what you need and nothing less.

3. Loan tenure

Running and growing a business is hard enough. Don’t let loan repayment add to your list of problems. Good things take time, and so do your business expansion efforts. With loan repayments pressuring and rushing your business, it will surely distract you from making the most out of your loan and expansion plans, which can be costly to remedy afterwards. Make sure you have enough time to comfortably pay off your loans at no additional cost to your business.

4. Approval time

In today’s fast-paced business landscape, time is of the essence! Don’t let slow loan approval prevent you from seizing that perfect opportunity to grow your business. Imagine having to watch the perfect investment opportunity being passed on to your competitors just because you did not have the cash on hand to seize it. This can have detrimental downstream effects on your business’s competitiveness. Especially for agile SMEs, you want a loan provider that can keep up with your pace of business.

Now that you know what to look out for in choosing a loan provider, let’s get to the shopping! Here are some of our handpicked loan options for your next business expansion.

Best SME Loans in Singapore

1. DBS SME Working Capital Loan

First on our list is Singapore’s largest bank, DBS. With a wide variety of loans available, there’s bound to be something that suits your business. Our top pick for SMEs would be the DBS SME Working Capital Loan due to its comfortable loan amount of up to $500,000, competitive interest of up to 8.5%, and flexible repayment of up to 5 years. While there are no annual fee charges, it’s worth noting the $500 processing fee.

2. Standard Chartered SME Working Capital Loan

Next we have Standard Chartered, who offers a wide range of loans for businesses of different sizes. Our pick is the Standard Chartered SME Working Capital Loan. With a loan limit of $5,000,000, this loan is sure to meet your SME’s cashflow and expenditure needs. Its interest rate also varies depending on loan amount to better provide fair loan servicing (contact SCB’s loan officer for exact rates). As for fees, there is a first year annual fee of max. 2% of your approved loan amount, which is reduced to $100 each additional year of tenure. You may also choose repayment periods ranging from 1 to 5 years.

3. UOB SME Working Capital Loan

Another provider of working capital loans is UOB, which offers up to $800,000 when bundling the SME Working Capital Loan with its standard Business Loan, as clearly illustrated here. This startup-friendly loan provides preferential interest rates thanks to government-assisted funding options (contact UOB’s loan officer for exact rates) and promises a 1-day response time, perfect for dynamic and agile SMEs. One potential downside is that annual fees for UOB’s SME loans tend to be higher than other banks like Standard Chartered and DBS, which can go up to $500, depending on the type of loan you take on.

4. OCBC Business Term Loan

Speaking of quick loan processing, OCBC’s Business Term Loan is perhaps one of the fastest options available. Designed to help SMEs with day-to-day operations and contingencies, the Business Term Loan provides up to $400,000, readily available via Singpass, to be repaid within 5 years. While it has a standard 2% annual fee, you may enjoy a 50% facility fee discount when applying online (up to $500). Interest rates range between 8.88% and 10.88% depending on the type of loan taken up.

5. Fazz Business Loan

Now, if you’re looking for some cash to tide you over in the short term and want to minimize interest payments, Fazz’s Business Loan might be the one for you. For smaller amounts of up to $300,000, Fazz charges an interest rate of only 0.05% per day. There is also a one-time processing fee of 3%, and you can expect your loan to be approved within 48 hours. 

While the loan tenure is rather short (6 months), you have the flexibility to change your loan into a revolving credit line, allowing you to continuously repay and re-borrow to suit your ever-changing business needs. This loan is designed to help your SME tide over credit crunches without having to worry about costs or approval time.


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