Free Loan Assesment
Enter your business name & email below to see all your best SME loan options instantly
Types of small business loans
Typical Business financing criteria and requirements
Minimum average daily balance of $10K maintained in bank account
Operational history of 1 year, preferably 2 years.
Most banks will require the latest 6 months bank statements, latest 2 years financial report, AR and AP ageing list, director’s NOA, list of existing banking facilities and GST returns (if applicable). Are you qualified for a business loan.
There are 3 major points out of many other factors that you have to pay careful attention to as they will have a serious impact on your eligibility to qualify for a bank loan.
Which Bank Gives Lowest Business Loan Interest Rate?
Each bank might have different interest rates but there are many other factors that influence the rates quoted. This includes the credit profile of the borrower, industry nature and size of the loan quantum. 2 different companies might receive different rates from the same bank depending on its debt-to-income ratio and the type of loan product being offered.
There are a few different types of small business loans available in the market.
Temporary Bridging Loan
Unsecured Business Term Loan
SME Working Capital Loan
Trade Financing
Factoring /Receivables Financing
Property Financing
Equipment Financing
SME Micro Loan
Before applying for any sort of financing, it is best that you do some research before you
apply. Or best to engage a loan consultant who is experienced in this field for advice. It
will save you much hassle and time.
Credit Score Advice
There is no equivalent for businesses; each commercial credit bureau scores and reports its own way. The most important factors for scoring businesses are usually how you pay your bills, how much debt you carry, and what type of industry you’re in.
Ways to Improve Your Company’s Business Credit Score
Limit Credit Usage and Keep Debt Levels on the Low While you may need a loan or two to boost the business and cover certain expenses, it is often advisable to keep any revolving dept low. Keeping low debt levels will lower you credit utilization, which works well in keep your credit rating high.
How can I improve?
Always repay loans on time.
Avoid making multiple loan enquiries in a short time.
Don’t have too many credit facilities open.
Never default on you loans.
Take and repay a loan to repair damage credit.
Just like with your personal accounts, your history with paying bills in a timely manner can affect your credit score. Get in the habit of paying all of you business bill on time to avoid negative outcomes.
Being the BIG THREE MAIN BANKS in Singapore, DBS, UOB & OCBC are where most businesses hold an account which naturally had been where they first approach for a business loan.
How long is the application processing time?
Most banks will usually take between 2-3 weeks to process a loan application. For more complex cases, processing time may take up to a month.
If you urgently require a fast business loan, you can consider engaging a SME loan consultant to help with the application process. Due to familiarity with the banks’ credit criteria, an experienced consultant can help expedite the turnaround time.
We’ve done some research via mystery shopping calls to their respective SME loan departments and quick checks on their websites’ product page. Here are the results we got:
| Tittle |
DBS BUSINESS DBS offers an unsecured business term loan for SMEs: |
OCBC Business Loan
OCBC unsecured business term loan product features: |
UOB Business Loan
UOB business term loan product is named Bizmoney loan: |
|---|---|---|---|
| Maximum Loan amount | 500K | 500K | 350K |
| Maximum loan repayment period | 5 years | 5 years | 4 years |
| Interest rate | 10.88% p.a. | 10.88% p.a. | 10.88% p.a. |
| Processing fee | 2% of loan amount | 2% of loan amount | 2% of loan amount |
| Early redemption penalty | 2.5% | 5% | 6.88% |
Most SMEs apply their loans from either of these 3 banks which holds a track record to their business
finances.
As the above reference you can see that all three of the major banks have almost identical loan features
and pricings, all starting from 10.88% p.a. EIR. The banks might also run periodic promotions where
slightly lower rates are offered.
Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors. This approach taps into the collective efforts of a large pool of individuals—primarily online via social media and crowdfunding platforms—and leverages their networks for greater reach and exposure.
- it can be a fast way to raise finance with o upfront fees
- pitching a project or business through the online platform can be a valuable form of marketing and result in media attention
- sharing your idea, you can often get feedback and expert guidance on how to improve it
- it is a good way to test the public’s reaction to your product/idea – if people are keen to invest it is a good sign that your idea could work well in the market
- investors can track your progress – this may help you to promote your brand through their networks
- ideas that may not appeal to conventional investors can often get financed more easily
- your investors can often become your most loyal customers through the financing process
- it’s an alternative finance option if you have struggled to get bank loans or traditional funding
Loan-based crowdfunding means that investors get their money back, usually with interest. And with investment-based crowdfunding, people put money in, usually for a share of your business. So they’ll see the value of their shares rise and fall, but you don’t need to pay back their investment.
Compare 3 Local Banks Business Loans
How to find the best loan ?
There are 20+ banks providing SME financing. Every one of them have different
credit criteria and risk appetite. There is no best bank, only the most suitable
bank, which criteria happen to fit your company’s profile.
Banks have different credit criteria
- Purpose of Funding
- Financials assesment
- Industry Nature
- Years in Business
- Cash Flow Assesment
- Director’s Personal Credit Conduct
Which bank’s business financing should you choose?
All 3 banks SME business loan product features are very similar. They are also priced almost identically with all 3 banks’ corporate loan interest rate starting from 10.88% p.a. EIR. The banks might also run periodic promotions where slightly lower rates are offered.
How much bank loan can your business get?
UOB business loan features are less attractive with the maximum quantum of $350K compared to both DBS and OCBC at $500K. UOB’s maximum loan tenure is also the shortest at 4 years.
P.S. Although all 3 banks publish their maximum loan quantum, do note in our experience, it’s not easy to qualify for their maximum limit. Most borrowers, in our opinion, will not be offered the maximum amount unless financials and all credit aspects are exceedingly strong.
The above figures are for reference only. Although financing product features are similar, do note that all 3 banks have different internal credit criteria.
For example:
OCBC’s business term loan will require the applicant company to be registered for minimum 2 years while UOB will require minimum 3 years of incorporation.
There are other multiple credit criteria that differ between the 3 banks, including age limit of director, industry nature of business, minimum revenue requirements etc…
Aside from our 3 local banks, there are about 20+ different banks, financial institutions and alternative financiers that offer working capital loan financing for SMEs.
To help you navigate the different criteria and credit requirements of all financiers, you can easily compare all banks’ SME loans with a free online business loan assessment and see all your funding options instantly!
Disclaimer: iBusiness does not purport to represent any of the 3 local banks in any manner. We are not able to guarantee the accuracy of the information presented here in perpetual as the banks might adjust their product features over time. All information on the 3 local banks business loan products presented in this article were obtained in January 2021 via their respective websites or calls to hotline. The information presented here is not meant to be relied on solely. If in doubt, please verify information again with the respective banks business loan department or seek professional help.
Startup Business Loan in Singapore
If you’ve just established a new business and sourcing for a startup business loan in Singapore, you might be disappointed. There are limited banks offering unsecured business loan to new company with no operational track record.
Most banks require borrowers to have minimum 2 to 3 years operational history before considering a business loan application.
If your business is operational for at least 6 months to < 2 years with decent cash flow, a competent SME business loan consultant might be able to source alternative financing options for you. But be prepared that financing options are limited for a start.
Most banks deem the risk of failure is too high for brand new start ups. For entrepreneurs targeting to get a loan to start a business, you might like to search for other funding channels instead.
Personal loans from banks, personal savings or funds from friends and family are common sources of startup capital. If you are a tech startup with potential to scale fast, private equity financing, angel investors and venture capital are also appropriate channels.
The First Step to Success
For all entrepreneurs it all started with an innovative and revolutionizing idea. Sad to say, money has been their biggest issue which dashed their dreams of becoming successful. At most times these entrepreneurs don’t have enough savings of their own to make dreams into reality, yet finding like-minded or charitable inventors isn’t at all an easy task.
Startup loan is the most common and efficient alternative for SME start up. It is financial program that many different financial entities provide for new entrepreneurs and it has a very flexible option that new start ups may consider. The approved amount has usually been generous with a reasonable fee and a long term payout time to allow a new SME to nurture. There are some conditions and terms to apply for a loan, these requisites are not too complicated nor hard to fulfill.
How to successfully get a loan
Getting a startup loan does have its condition and process fulfill. This is a requirement necessary for financial entities to better understand whether the borrower is capable of repaying under the respective terms and conditions. It helps banks and lenders determine the highest amount to providers, to get the most of their returns.
-
- Developing a proper business plan
To gain confidence from borrowers, you have to have a well-structured business plan to show. Borrower wants to know the ‘how about’ of the venture, the products/services offered, all the relevant information and datas.
-
- Professional experience
Banks and lenders will study the borrower’s personal profile to understand the abilities and strength of the provider, whether he or she is capable of running the business, handling a company.
-
- Managing the personal finances
Mortgages, credit card payments, incomes, and other relevant financial information are descriptions of a person’s credit rating. These are some factors that financial entities use to decide the total loan amount leadable to the borrower. Terms and conditions are often established with all these accumulated information.
Bottom Line
To your best interest, we are here to assist you with a good head start by securing the best startup loan amount possible to put you efforts and dreams into accomplishment. By sharing with us your business plan, we will be able to calculate the variable amount that can be accorded to you, as well as to carefully draft a term for loan repayments that will allow you space to achieve your business goals. Hoping to boost your business growth, helping entrepreneurs walk into their success, in mind that all new business needs time before it starts reaping the rewards. Designing and structuring a payment period for every unique individual. Finding the best match to match up with your situation.
Don’t get into a bad deal
We know that starting a new business can be a complicated task, but we are also
sure that it is not an impossible thing. Besides, it is important to know that even though you
may desperately need the money, you have to take your time in order to study which
financial entity you are appointing, in order to receive the funds to start your
entrepreneurship. Consider that there are financial companies with really high interest ratios
and low opportunities for negotiation, so this decision is vital.
We invite you to make the right choice and engage us. We are a team of financial experts
that know how to properly work with money and our deals and opportunities are the best of the
market. Our biggest priority is our clients, and we know how to take care of them by carefully
assessing their projects and proposals in order to provide the best loan terms.
We want to evaluate your startup so that we can visualize the company in the future. Show
us your idea through your business plan and share your considerations and concerns. Let us know
more about you, so that we may provide you with advice and a good startup loan needed to pursue
your dreams.
The best way to start a business
Financial backing and support is one of the key reasons for good ideas to be transformed
into a successful business. Entrepreneurs dream about establishing a strong company that would
eventually reap generous returns.
A startup loan accompanied by good financial and productive management ensures very good
results when starting a new business. That is what startup loans are for, to make those ventures
happen.
A good business plan is the best way to get a good loan, not to mention the ratings and the
expected profits of a company. In addition, it is important for you to know how to properly choose
your team. Having a good financial balance is very important if you want to get money lending in the
future.
So remember, don’t hesitate to contact us today. Bring your business plan and let us help you.
Let us assist in making your dreams come true. We have good strategies and plans to help you with
your startup. Come work with us and discover the difference.
Business loan with bad credit?
A common query some business owners have is if it’s possible to qualify for a corporate loan with bad credit history?
If the business owner has poor credit rating due to previous defaults or late payments on personal credit facilities, it will definitely affect the company’s financing approval chances as well.
If your credit rating score is low due to bad conduct payments of credit cards, car loan or home loan etc you might like to seek ways to improve your credit rating first before applying for business financing.
Depending on how adverse your credit history is, you might still be able to remedy it by clearing off all outstanding dues on your credit facilities. It is advisable to only apply for a business loan after you have sorted out your personal credit issues.
You will usually need a score of at least 500 to secure a business loan, such as a short-term
loan or line of credit. Some online lenders do not have any stated minimum credit score requirement. However, they will usually pull your credit and verify your personal and business information to look for any red flags that would indicate you won’t be able to repay your loan.
Yes, it is possible to get a business loan if you have bad credit. However, you will most likely
face larger fees and smaller borrowing amounts than borrowers with good credit. If you have poor
credit, you might be able to improve your chances of getting a loan if you can put up collateral or
prove that you have strong credentials in other areas (i.e., healthy business revenue and industry
experience).We Will Devise An Out-Of-The-Box Strategy To Get The Financing You Need For Your
Business.
Free Loan Assesment
Enter your business name & email below to see all your best SME loan options instantly
Contact Us
Make Us your Choice!
Call Us @+6583363133 or email to contact@frcapital.sg Today!
About iBusiness
iBusiness is a Singapore consultancy firm that helps SMEs to secure business loans from banks and financial institutions. We concentrate on SME finance, and through our expertise and network, we help clients secure funding with low-interest rates efficiently and hassle-free.
iBusiness is the preferred SME financing partner and trusted by many Singapore businesses. Our aim is to help companies to obtain the best financing offers available in the market, including professional advice, lower interest rates and larger loans to ensure that they achieve their financial objectives, helping them develop their highest potential.
Enjoy convenient and easy applications with our team of experienced financial experts with extensive portfolios and networks.
Since our humble beginnings, we have successfully established a team of experienced financial experts with extensive portfolios and networks in our local financing markets. From business loans to mortgage loans, commercial to personal property refinancing loans, we have been serving our customers with the same passion since we have started, and have been trusted by them to be their one-stop financing partner.
Frequently asked questions
Guides to business borrowing
Improve your credit score
Business credit cards
Business credit cards
Business credit cards, unlike personal credit cards, are designed specifically for work expenditure. They may include features such as additional cards for employees, customisable spending limits and expense tracking.
Both credit cards, however, are similar in a few other ways. Both give you access to funds up to a specified limit, and allow you to pay off outstanding balance over time (albeit with interest charges if you fail to make payment on time). They also include annual fees, as well as additional costs such as rewards redemption cost.
As a business owner, a business credit card gives you more control and visibility over your business expenses. It can also help you to manage your company’s travel and entertainment expenses. You can also enjoy other perks such as:
- Rebates or rewards on your spending
- Complimentary travel insurance
- Withdrawal services worldwide
- Complimentary lounge visits
You could also have at your disposal management and reporting tools, as well as insurance coverage for employee misuse.
Ref: https://www.bestinsingapore.co/best-corporate-credit-cards-singapore/
Having a business bank account is the easiest way to manage your company’s finances. Choosing the best business bank account in Singapore to suit your company’s needs can help to streamline processes and payments.
How is opening a business bank account in Singapore useful?
Opening a business account will make it easier to keep track of your expenses and earnings. This keeps things neat, making accounting, managing your expenses, and analysing business goals more efficient.
But how do you know which business bank account is the best for your company?
5 Things to look out for when opening a business bank account in Singapore:
- Monthly fees
- Minimum deposit and balance
- Usability and ease of access
- Limits on transfers and foreign currency conversion fees
- Customer support networks
Your guide to the best business bank accounts in Singapore
With so many options, it’s easy to get overwhelmed. To help you make a more informed decision, we’ve compiled a rundown of the most popular bank accounts for companies in Singapore.
DBS Business Digital Account
DBS offers a few different business bank accounts depending on your company type and goals. With a low initial deposit of S$1,000 and no minimum balance, the DBS Business Digital Account is their most popular business bank account.
Opening an account at DBS also has a pretty fast turnaround rate—the account will be ready to use by the next business day. To track your expenses, simply log into DBS iBanking, or head to one of the many DBS branches and ATMs located around the island.
However, opening a business bank account with DBS costs S$18 a month—the highest amongst all the business bank accounts in this article. On top of that, the DBS Business Digital Account also charges upwards of S$30 for the handling and processing for foreign transfers.
If you’re just dipping your toes into the start-up industry, these fees could quickly add up to your company expenses.
OCBC Business Growth Account
Like DBS, OCBC has a variety of business bank accounts tailored for businesses of varying scales. The OCBC Business Growth Account caters to smaller companies such as start-ups. With no initial minimum deposit or balance required, the OCBC Business Growth Account offers fuss-free and no-cost set-ups. Accounts can be opened on the OCBC website, through their IBanking service.
It also charges a lower monthly fee of S$10, as compared to the DBS Business Digital Account. This monthly fee is waived for the first two months if you choose to set up your business bank account in Singapore with OCBC. Although OCBC has a lower cost-average than DBS, take note that they do charge similar rates for the handling and processing of foreign transfers.
UOB Current Account
In terms of initial minimum deposit, UOB’s Business Current Account is on par with the DBS Business Digital Account. You’re required to have a minimum deposit of S$1,000 when you set up an account. Unlike DBS and OCBC, setting up a business bank account in Singapore with UOB will require a minimum daily balance of S$10,000. Which means that falling below the minimum balance required incurs a fee of S$35.
These high maintenance costs might not be the most ideal situation for young entrepreneurs. Running a start-up requires a high number of transactions and capital. Incurring unnecessary costs from your business bank account might not be very advisable for smaller companies.
Maybank Flexibiz Account
Another contender is the Maybank Flexibiz Account. Popular with companies that are working on a tight budget, this business bank account in Singapore offers a similar minimum initial deposit of S$1,000 as DBS. With no monthly maintenance fees, the Maybank Flexibiz Account offers smaller companies more space to focus on their business needs.
However, Maybank also charges the highest Forex mark-up rate at 0.91%. If your company deals with many foreign transactions in its daily operations, this might be a deal-breaker when choosing it as the business account for you.
| Business Digital Account | Business Growth Account | SGD Current Account | FlexiBiz Account | |
|---|---|---|---|---|
| Account | ||||
| Monthly Fees | $18 | $10 | $35 / year | $0 |
| Minimum Deposit | $1,000 | $0 | $1,000 | $1,000 |
| Minimum Balance | $0 | $0 | $10,000 | $0 |
| Fall-Below Fees | $0 | $0 | $35 | $0 |
| Local Transfer | ||||
| FAST Transfer | $0.50 | $0 | $0.50 | $0.20 |
| Standing Instruction | $10 | $10 | $5 | $10 |
| Foreign Transfers | ||||
| Handling Fee | $10 | $10 | $10 | $20 |
| Processing Fee | $20 | $25 | $30 | $20 |
| Inbound Fee | $10 | $10 | $10 | $10 |
| FX Markup (Average) | 0.47% | 0.46% | 0.48% | 0.91% |
| Account Features | ||||
| Card Type | Visa Debit | Visa Debit | Visa Debit | Visa Debit |
| Cashback | 0.3% | 0.2% | 0.3% | N/A |
| Payment Acceptance | FAST, GIRO, Cheque | FAST, GIRO, Cheque | FAST, GIRO, Cheque | FAST, GIRO, Cheque |
| Customer Support | N/A | N/A | N/A | N/A |
What are the documents I need to prepare for a business loan?
- Acra business profile information
- Latest NOA of ALL directors
- Latest CBS report of ALL directors
- Latest 2 year of company’s financial statements
- Latest 6 months of bank statements
Ensuring that you have the right documents on hand before submission may increase your chances of
obtaining the right business loan.
Why are all these documents needed? How to obtain them?
1. ACRA Business Profile Information
(ACRA) – a document that shows your business information, directors and shareholders, as well as your company’s paid-up capital.
ACRA is used by financiers to identify the company’s directors, understand the type of industry you are in and ascertain who to bringin as a guarantor if required.
2. Latest 2 Years’ Notice Of Assessment (NOA) Of All Directors
The (NOA)-Notice of Assessment of the company’s directors’ for the last 2 years will be needed by financiers to understand their declared incomes.
the financier would need the company directors’ Notice of Assessment (NOA) over the last 2 years to find out about their declared incomes.
*You should note that the NOA here refers to the personal NOA of the directors, and not the company’s NOA.
The directors’ income in their personal NOA will be 1 of the factors taken into consideration to determine the business loan amount and tenor the business is eligible for.
The NOA, combined with the CBS Report, gives financiers a sense of the total debt-to-income ratio. If the amount of unsecured debts exceed the director’s income, financiers are less inclined to offer a loan because the directors are perceived as being less capable to repay the loan.
Proceed to IRAS to download your NOA.
3. Latest Credit Bureau Singapore (CBS) Report Of All Directors
(CBS)-Credit Bureau SIngapore report are for financiers to view your company directors’ repayment histories, existing loans and outstanding unsecured loans.
The creditworthiness of the borrower is reflected based on their grades in the CBS report.
The general credit ratings range from AA-HH (AA being the best, and HH the worst).
You can either obtain your CBS report from CBS for $6 or if you have applied for a credit card previously, you can receive a free report within 30 days of application.
The highest possible credit score risk grade is AA. Grades of B or C indicate delinquency or late repayments, and grades of D or lower are often caused by defaults (the bank was forced to write off the loan).
Credit scores help lenders decide whether or not to approve loan applications and determine what loan terms to offer. The scores are generated by algorithms using information from your credit reports, which summarize your borrowing history.
What is your credit score?
Your credit behaviour as outlined above is aggregated into a score between 1,000 and 2,000. Those on the lowest end of the scale, that is 1,000 points, are flagged as having the highest risk of defaulting on a payment. They are rated HH. Those at the highest end of the score range, at 2,000 points, are perceived to have the lowest risk. And they would enjoy the best credit rating of AA.
Lenders will use the credit score as one factor in their lending decisions. Other factors may include your annual salary, length of employment and bankruptcy or litigation information. Your credit score may also influence whether the lender will extend loans to you at the lowest rates offered to the borrowers with the best credit rating.
Your account repayment history is kept on a 12-month rolling basis, for your credit score calculation. So, it is possible to rebuild your account repayment record within 12 months if you are on time with all your payments.
However, inquiries by financial institutions for your credit report will be retained for 2 years. Default records with the status of “negotiated” or “full settlement” will be displayed for 3 years. Default records with status of outstanding, partial payment and “sold off” will be displayed indefinitely.
How to improve your credit score risk grade in Singapore
To bring up your credit score to an AA (or close to it), you should:
Always repay loans on time
Avoid making multiple loan enquiries in a short time
Don’t have too many credit facilities open
Never default on your loans
Take and repay a loan to repair damaged credit
Credits: Credit Bureau Singapore
4. Latest 2 Years’ Company’s Financial Statements
The latest 2 years of your financial statements, which includes the last 2 years of profit and loss statements and balance sheets will also be required by financiers to determine your company’s historical performance.
*Your company’s auditors are usually responsible for preparing these documents unless using accounting software.
5. Latest 6 Months Of Bank Statements
The bank statement shows your company’s day-to-day transactions. The company’s revenues and expenses, as well as the balance sheet at the end of the month helps financiers gauge the ability of repaying the loan on time.
It also indicates the cash flow of your company.
*You can easily retrieve bank statements from the banks in charge of your corporate accounts.
In addition, you may include Accounts Receivables Aging List.
It lists down the names of your clients and the amounts that you are expected to receive from them for the products or services you have rendered.
The Accounts Receivables Aging List also shows your overall debts, how long these debts have been overdue, as well as your clients.
This document may be used for determining if you are eligible for invoice financing, another form of business loans.
In the event that your company has been in operation for less than 2 years, you can still submit your statements and documents for the past year to show the financiers what your company has achieved so far.
Apply for a Business Loan Now!
FRcapital will match you with the best financial leader in the shortest time
Free Loan Assesment
Enter your business name & email below to see all your best SME loan options instantly