Compare business loans
Name | Interest Rate From | Maximum Loan Amount | Minimum Loan Term | Maximum Loan Term | Collateral-free | |
---|---|---|---|---|---|---|
OCBC Business Term Loan |
10.88% | S$500,000 | 1 year | 5 years | Yes | |
Aspire Business Line of Credit |
1% | S$250,000 | No minimum loan term | Credits lines are reviewed every 6 months | Yes | |
Validus Purchase Order Financing
|
1.5% | S$250,000 | 30 days | 90 days | Yes | |
DBS Business Loan |
11.5% | S$500,000 | 1 year | 5 years | Yes | |
UOB SME Enhanced Working Capital Loan | 2.88% | S$1,000,000 | 1 year | 5 years | Yes |
How do business loans work?
Businesses can either be lent a lump-sum payment or a revolving line of credit, which is repaid, with interest, over an agreed term (generally anywhere from three months to five years).
Business loans come as either secured or unsecured loans and allow businesses to borrow from $5,000 to $1,000,000, though some lenders do not limit their borrowing amounts. Most business loans come with a fixed interest rate, and you will need to make repayments on a daily, weekly, or monthly basis.
Do you have the best loan for your business?
The best loan for your business will vary depending on some factors, such as:
- How much money the company needs
- The nature & structure of your company
- Whether you need one large lump sum or a set of smaller cash injections
- What your company is buying/spending the money on
- Your circumstances/the circumstances of any other owners or directors
- Your business’s income
Every business is distinct and will therefore have different needs & requirements. Luckily, nobody understands your company better than you do – all you need is to understand your choices. That’s what we’re here.
How can you compare business loans?
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Do you meet the eligibility criteria?
You can find details of the qualification criteria involved with each loan product by clicking the “More info” buttons on the comparison table. Checking whether you meet the minimum qualification criteria before applying is the first step in your comparison process. This will help you to narrow down the choices that are the best for you. If you do not reach the minimum qualification criteria for a loan, do not apply for that loan.
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How much will the business loan cost?
If you understand what loan you need, the next step is choosing what your business can afford. Look at your incomings & outgoings to see what you could conveniently repay without putting too much strain on the company. If it’s a loan for a start-up, you’ll need to rely on cash flow projections.
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Compare business loan interest rates & fees.
Once you’ve decided what you can afford to borrow, you should compare the rate & fees or charges for various business loans to find the one representing the best value for your business.
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Do the repayment terms meet your business’s needs?
Lenders offer repayment terms of differing flexibility. Some will allow you to repay every day, others weekly, and some will ask you to repay your loan monthly. Work out which will best fit your business’s needs in terms of your cash flow.
How do lenders judge your business loan application?
Lenders use various criteria to see if you fit their risk profile & ensure your business can repay the loan.
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Age and turnover of the business
Start-up finance is usually more challenging to find and approved for, so if your business is established, you will find it simpler to get a loan. Business turnover is also considered, and lenders typically have a minimum monthly or yearly turnover requirement. They may also use your turnover to decide what the business can afford to repay.
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Credit profile
The lender will evaluate the company directors’ credit scores as part of the application process, and if the company is established, the lender will also check the company’s credit score. Evaluating credit scores allows lenders to decide how risky your business is to lend.
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Credit card volume
If you receive credit card payments in your company, lenders may use the volume of these payments to assess your ability to repay the loan. The assumption amongst some new lenders is that you will use this volume to repay the loan.
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Accounts receivable
Like credit card volume, lenders may factor your accounts receivable value into their asset ratios to help them decide.
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Company structure
Lenders will check what business structure you have & how long you have been in the existing structure. If you have newly undertaken a restructure or are asking for finance in the middle of restructuring, lenders may not want to finance you at this time.
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Existing debt
Does your company have a current debt with another lender? This will be judged as part of your application.
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Profitability
For various business loans, including example a revolving line of credit, your business will usually need to be profitable to be approved.
What are business financing options are available?
Business finance is split into two (2) main categories: debt finance & equity finance. Equity finance is provided by an owner or an external investor, whereas debt finance is given by a bank, credit union, or business lender. Below, you can find out more information about the different types of short-term & long-term business debt finance available.
Other inquiries you may have
What should I avoid when applying for a business loan?
Applicants make many mistakes when applying for a business loan, from choosing the wrong loan option to submitting an incomplete application.
Regarding the type of loan, it’s always a good idea to think realistically about what would best suit the company in terms of finance volume, flexibility & repayments.
When it comes to presenting the documents, you should always understand what you’ll need to give to the lender before beginning your application. Omitting or forgetting to submit vital information or documents may lead to delayed or rejected applications altogether.
Why was my application rejected?
There are many reasons why a lender may reject a business loan application. It is essential to ask for feedback from your lender if they leave your application. This feedback will give you an idea of what you did wrong, which you can improve for the next time you apply. If the lender cannot provide this feedback, you may want to evaluate your application & see if you can spot any red flags yourself.
Is my personal credit file checked or my company credit file?
The lender will define which credit history they will need to verify, but usually, the lender will want to check the company directors’ credit records. Your business’s financials may also be reviewed using accounting information you provide as part of the application process.
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About FR Capital
FR Capital 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.