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How To Get a Working Capital Loan for Your Small Business in 2024

19 January 2023

, posted by 

Aldean Moch Rafli


Working capital–or the lack thereof–is one component of running a business that concerns SME owners. After all, they might encounter opportunities that promise better growth, but may not have the financial resources to seize them. This is when they would often seek a working capital loan.

However, getting a small business loan might also present a challenge, especially when they have not been in business long enough or have not reached a certain stage of maturity. During these stages, they are most vulnerable to cash flow gaps. Fortunately, small business owners could bridge these gaps with a working capital loan.

What Is a Working Capital Loan?

A working capital loan helps to finance a company’s day-to-day operations, covering its short-term operational needs such as payroll, rent, equipment, and debt payments. 

For example, if a small business faces an increased demand for their product, they might need extra capital to boost their production. In other cases, they might want to take advantage of discounts on large purchases from their supplier. By having access to a working capital loan, they can do this without interfering with their cash flow.

Small business loans can be either secured or unsecured. Unsecured loans, which are not backed by collateral, usually require a higher credit score to be approved by lenders. These loans are commonly issued by banks, credit unions and online lenders to be repaid with interest.

How Does It Differ from Other Business Loans?

Compared to other business loans, a working capital loan is more short-term as it is only used to finance a business’ operating costs instead of its long-term assets. Most do not require any collateral, so young businesses can apply for it easily. In Singapore, the maximum repayment period for small businesses is five years with 50% government risk sharing.

Keep in mind that working capital loans are generally not used for long-term assets and investments, as there are other loan types with better interest rates for such investments.

Why Do You Need a Working Capital Loan?

1.    Less stringent payment terms

Working capital loans can be paid on your own terms with a longer tenure period (3-5 years) based on your loan amount. You can pay off the debt without impacting your cash flow.

2.    Expand your business with ease

With small business loans, startups and young businesses have the opportunity to expand their business without needing to have costly investments and assets on their hands.

3.    Quicker process

Working capital loans are usually processed quickly as long as you have submitted all the required documents. You can find out if you’re qualified and start using the loan for your daily operations.

4.    Create a solid credit score

By picking up a small business loan and making sure to repay it in time, you can build or fix your credit score for future loans or other needs.

5.    Less risk

As there is no collateral involved, working capital loans are less risky and you are still in control of your company assets.

Small business owners can benefit from a working capital loan as it’s relatively easier to get than long-term business loans, while letting efficiently cover any gaps in their expenses. 

Moreover, since it is a form of debt financing, an equity transaction is not necessary. A small business owner is still in full control of their company. Overall, a small business loan is ideal for business owners who need short-funding access. Here is a guide to help you get a working capital loan for your small business in 2024!

How to Get a Working Capital Loan

1.    Check your eligibility

To apply for a working capital loan in Singapore, your small business needs to be registered in Singapore, with a minimum of 30% local shareholding and an annual sales which do not exceed $100 million, or your group employment size does not exceed 200.

2.    Consider your borrowing needs

Evaluate how much working capital your small business needs, and for how long. You need to know how much you can afford to pay each month, and if you require a lump-sum payment or on an as-needed basis.

3.    Check your business and personal credit score

Lenders will evaluate your business and personal credit score. Check your score as a reflection of your chances of getting approved. A better score will make you qualified for better rates and terms.

4.    Research and compare lenders

While there are many lenders to choose from, pick one that suits you best based on their interest rates, repayment terms, flexibility, and fees. Make sure to verify the lender’s fee structure and see if there are any additional costs before making your choice.

These days, business owners have no shortage of options. You may decide to take up a loan from a traditional bank or an alternative lender such as Fazz Business. Here at Fazz, business loans come with low interest rates and a fast application process. Small business owners can apply for a loan more conveniently as there is no collateral required.

5.    Gather required documentation

Most financial institutions require working capital loan applicants to provide information about any existing business loans and submit at least 12 months of personal and business bank statements, including tax returns for two years or more. Having a detailed business plan is also often necessary, especially for small businesses.

6.    Submit a formal loan application

Once you have gathered all the necessary documents, you can submit a formal loan application through the lender’s website or branch. If the lender needs any additional information to process your application, they might contact you by phone or email. If you are qualified, they may proceed to make a loan offer. For most lenders, you can also check your application status online.


These are the steps to take if you wish to apply for a working capital loan in Singapore. In any business, dire financial needs might arise, which requires you to have access to cash immediately. This is when applying for a working capital loan can greatly help. Make sure to pay attention to the loan requirements and determine whether you are eligible before you apply.

Grow your business with a Fazz Business Loan

If you are a small business owner looking for a working capital loan to run your day-to-day operations, Fazz Business is here to help. Gain capital support to close your cash flow gaps and leverage more opportunities to fund your business expansion with short-term loans of 6 to 12 months tenure. With daily interest rates as low as 0.05% with approval within 48 hours, accelerate your growth with a Fazz Business Loan today!


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