Whether you’re in a rut or going strong and want your company to expand, you’ll need a business loan.
Before deciding on the best business loan for your needs, consider:
- Your company’s credit history
- Your company’s financial history
- Your company’s age
- The required paperwork
- Interest rates
- Loan tenure
- Whether the Singapore government guarantees them or not
MPM Capital is one of the best financial institutions in Singapore that offers business loans. Our upper management consists of experienced entrepreneurs who have a great amount of experience in different industries.
With our platform, we hope to help other entrepreneurs improve or expand their businesses.
If you are looking for business financing, let us discuss all these issues below as we compare five of the best and fast small business loans in Singapore.
What Is A Business Loan?
A business loan is money your company borrows to achieve its goals. The best business loan is crafted depending on your purpose and type of company.
| What Is A Business Loan? | |
|---|---|
| The Typical Business Loan | - No collateral needed. - The usual maximum tenure is five years. - Some banks in Singapore impose conditions regarding your company’s minimum age and revenue. |
| SME Working Capital Loan | - Best for SMEs up to 200 employees - You can receive a maximum of $1 million/ borrower from Singapore’s government - The usual tenure varies from one to five years - Your SME must have at least a 30% Singaporean / PR ownership |
| Temporary Bridging Loan | - Best for helping your company during the COVID-19 pandemic - Best for all Singapore businesses that are registered in the country - Maximum amount: $5 million - Maximum loan tenure: 5 years |
| Startup Business Loan | - A mini-business loan for startup companies who lack financial history - Maximum amount: usually $100,000 |
Questions To Ask Yourself Before Getting A Business Loan
Q: Why do I need this money?
A: You may need this business loan for:
- For new equipment
- Machinery
- Hiring new people
- Business expansion in another region
- Utility bills
Your purpose and company’s size influence the type of loan you’ll choose. For instance, if your startup is having a hard time with utility bills after the COVID-19 outbreak, consider a Temporary Bridging Loan. If you need new equipment, choose a Standard Business Loan.
Q: How much can I borrow?
A: Assess your Debt Service Covering Ratio. DSCR is the result of dividing your net income by your company’s total debt. If your DSCR is less than one, you may not afford a new loan now. Many moneylenders and banks in Singapore prefer a DSCR of over 1.3.
Q: How can I make sure that I can repay the loan and make a profit?
A: Do a loan performance analysis for your small business loan. You can either check in with your accountant or use an online loan calculator.
Q: Am I eligible for a business loan?
A: Take your credit score into account apart from other eligibility conditions. If you have an SME, you have more chances to qualify with a high credit rating.
Get your credit report from Credit Bureau Singapore and look for any errors. If you don’t need this loan urgently, you should increase your credit score by paying off some of your debt and closing some credit lines.
Q: How can I increase my chances of getting the best business loan?
A: Increase your chances of securing the best business loan by presenting a detailed, actionable, and measurable business plan. Highlight your management expertise by showing your banks how you intend to use every cent from their loan.
If you don’t currently qualify for a substantial loan amount, this strategy helps you obtain several smaller loans. Break down your business goal into smaller objectives and use each successive loan to achieve a particular purpose.
It might be harder to secure a business loan from local banks due to their strict requirements. They have a standard operating procedure that has to be followed.
For those who require business loans urgently, they can find out their options here or drop a WhatsApp message to 8873-9263.
5 Best Small Business Loans In Singapore
1. UOB Business Loan
The UOB Business Loan helps you increase revenues through two government-backed programmes. Both the Temporary Bridging Loan and the SME Working Capital Loan feature low rates and tenures up to five years.
Most people who choose this business loan from UOB had companies affected by the COVID-19 pandemic. UOB helped them with fast approvals within one business day and easy online application.
Use their embedded loan calculator to assess your interest rate, instalment sums, and tenure. The eligibility conditions include:
- Companies registered and operating in Singapore with a minimum of 30% local shareholding
- Minimum age: three years
- Maximum $100 million sales revenue or up to 200 employees
2. HSBC SME Financing
HSBC SME Financing disburses working capital loans that tide you over difficult periods. That’s why HSBC collaborates in several financing programmes:
- The SME Working Capital Loan gives you access to $1 million
- The Temporary Bridging Loan allows you to access up to $5 million with a maximum interest rate of 5% if you’re choosing HSBC
- The Enterprise Financing Scheme provides companies with $10 million and a 90% governmental risk share
If you qualify for one of the first two loan options, HSBC offers a one-year deferral for your principal sums. Thus, you’ll only reimburse your loan’s interest for one year until your company recovers.
3. DBS SME Working Capital Loan
DBS, the bank that almost everyone has an account with.
DBS SME Working Capital Loan allows you to access a maximum of $300,000/ borrower or $5 million/ borrower group without any collateral.
Make sure you fit the eligibility conditions before applying. DBS is a trustworthy bank that boasts convenient interest rates.
Their unique selling proposition is the Product Finder Feature. So, if you’re not sure what type of loan you need, DBS will help you quickly. You can also get in touch with an RM directly from their website if you need a specialised agent’s counsel.
4. Citibank Business Loan
Citibank’s Business Loan addresses SMEs who want to expand. Their loan packages are flexible and affordable. Citibank’s expert agents will craft the best financial package to help your company:
- Manage all business transactions
- Expand in new regions
- Withstand unpredictable market fluctuations
Besides, if you decide on Citibank’s Business Loan, you’ll get seamless access to your bank accounts anytime, anywhere.
5. MPM Capital Flexible Business Funding
MPM Capital Flexible Business Funding is an excellent solution for companies who want to access more substantial sums up to $2 million.
But MPM Capital is one of the best choices thanks to its customer-oriented culture. For example, you can send in a loan request and receive your pre-approval as quickly as 24 hours.
MPM Capital offers competitive rates and flexible reimbursement schemes. That means you’ll be able to reimburse this loan seamlessly while also growing your revenues.
The unique selling proposition, though, is highly personalised business loan solutions. Remember that SMEs range across sectors and industries, so they’re hugely dissimilar even if they have comparable revenues and employees.
That’s why MPM Capital devised tailored-made business loans for each company’s particularities. For instance, you can access:
- Tuition Centre Business Loan
- Dental Clinic Business Loan
- Dermatology Clinic Business Loan
- Pubs & Bars Business Loan
- And many more
If you are interested to find out more, you can submit an enquiry here. There will be no obligations.
The Benefits Of Getting An SME Business Loan
Business loans come with many benefits:
- You can choose between several financial packages
- You can access substantial sums
- Some loans have government backing
- Some banks allow length deferrals of your principal loan
- Business loans have competitive rates
- The loan tenures are flexible and accommodating
- You can apply effortlessly online as many banks’ platforms are synchronised with My Info
- You can receive the cash you need within one business day
- You can use this liquidity for all of your business goals
Here’s the catch:
You can reap all these advantages only if you access the best business loan for your needs. That means a highly customised and flexible loan with affordable interest rates that’s tailor-made for your company.
