BUSINESS TERM LOAN SINGAPORE

Get a Business Term Loan to Support your business’s daily operations, fund your expansion plans and fulfil your current project cashflow needs.

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    BUSINESS TERM LOAN SINGAPORE

    A Business Term Loan for your day-to-day operations, business expansion or contingency for your working capital in Singapore.

    Business Term Loans in Singapore may be used to benefit your business in a multitude of ways, such as to purchase fixed assets like equipment for production processes.

    These pieces of equipment will begin to prove a constant stream of revenue for your business while your loan is being repaid. Be it for property expansion, investment injection, or new technology implementation, Bizsquare provides you easy access to additional funds, from Temporary Bridging Loan to Working Capital Loans to property secured loans, so that you can fully focus on growing your business.

    In this case, Business Term Loan refers to a loan where the Banks and Fi do not get any support from the government scheme and lend out to the respective SME based solely on their own internal risk and funding capacity.

    Therefore, they are of a higher interest rate than the government-supported business loan.

    Borrow as much as SGD500,000 at attractive interest rates for up to five years with this collateral-free loan.

    WE LOOK INTO THE FOLLOWING AND HELP YOU TO EXPLAIN TO THE BANKS ON THE FOLLOWING INFORMATION OF YOUR COMPANY:

    WHY SMES CHOOSE BUSINESS TERM LOAN?

    OPEN TO ALL BUSINESSES

    Including companies that don't qualify for government-assisted loans.

    BORROW UP TO SGD 500,000

    Support your operational expenses or business expansion Loan amount is approved based on the bank's assessment.

    TAKE UP TO 5 YEARS TO REPAY

    Enjoy a flexible repayment period of 1 to 5 years.

    DOCUMENTS TO PREPARE

    1. Latest 2 years Financial Statement
    2. Latest 2 years NOA of director
    3. Last 6 months company bank statement
    4. NRIC
    5. Invoices/ Aging list (if applicable)
    6. Credit Bureau Report

    OTHER TYPES OF BUSINESS LOANS THAT
    BIZSQUARE CAN APPLY

    TEMPORARY BRIDGING LOAN

    The Temporary Bridging Loan Programme (TBLP) provides access to working capital for
    business needs. As announced at Supplementary Budget 2020, eligible enterprises may
    borrow up to $3 million under the TBLP, with the interest rate cap at 5% per annum, from
    Participating Financial Institutions (PFIs). The Government will provide 70% risk-share on
    these loans.

    WORKING CAPITAL LOANS

    SME Working Capital Loan Singapore is a loan used by companies to cover day-to-day operational expenses in Singapore.

    To support viable SMEs that may have cash flow concerns or wish to continue growing their business, the Government has introduced a new SME Working Capital Loan scheme, for loans of up to S$300,000 per SME. Under this scheme, the Government will co-share 50% of the default risk of these loans with participating financial institutions, to encourage lending to SMEs. This will help SME pay a lower amount of interest.

    TRADE LOANS

    Trade Loan covers enterprises’ domestic and overseas transactions. It also complements the current Loan Insurance Scheme (LIS) by insuring loans which are beyond the capacity of current LIS insurers.

    PROPERTY LOANS

    Commercial real estate financing is very different from home financing. In home financing, the transaction is based on the value of the home at the time of the sale. When taking financing for your commercial property purchase, the financial institutions will base it on the value of the business in the future and look at your business profit and cashflow. In addition, commercial real estate financing can take on very different terms.

    A commercial or industrial property loan bears the lowest interest among all SME financing facilities.

    Although property loan is considered less risky to the bank versus unsecured business loan, the banks do assess the company’s repayment ability as well.

    Banks usually can finance up to 80% of the purchase price of the property or current market valuation, whichever is lower.

    Many savvy SME bosses with commercial and industrial properties will also use their property as collateral for business financing.

    TIP:

    If you are considering purchasing your own commercial/ industrial property, do note to apply for financing first before committing the option to purchase to seller. This is to gauge the maximum financing amount your company is eligible for without risking the loss of your deposit.

    SME LOAN INTEREST RATE IN SINGAPORE

    Business loan interest rate differs from various banks and type of financing.

    In general: For unsecured loans without collateral, interest is usually higher compared to secured loan with collateral pledged to the banks.

    Below table shows the range of business loans interest rates for various SME loan products:

    FINANCIAL EXAMPLE DONE BY BIZSQUARE

    ABC Technology is located in the central area and has been operating for the last seven years with a consistent number of customers. However, due to Covid-19, the business revenue went down and do not have enough reserves to pay the employees and supplies.

    Faced with such situation, the owners of ABC Technology approached Bizsquare for financing option. Bizsquare suggested that ABC Technology should consider a Term Loan to the get funds.

    Taking up the term loan financing option is the best decision they have made thus far. Term loan financing provides a convenient and hassle free way to finance their business. As a result, they were able to get the funds they needed.

    Bizsquare has offered ABC Technology the following terms:

    Business Loan: $300,000
    Interest Rate: 3% effective
    Monthly Repayment: $5,390 X 60 months

    In this example, ABC Technology was able to pay for supplies and their employees to be able to operate. It only needs to pay $5,390 per month through a Term Loan agreement.

    * Disclaimer: Example above is merely shown for illustration purpose to better allow readers to understand the uses of each financing solution. Figures and interest rates listed above are not representative; it may differ based on each company’s requirements and management’s approval. Additional terms and conditions may also apply based on the credit assessment and evaluation conducted during application. Bizsquare Management Consultants Pte Ltd and its employees make no representation or warranty, whether expressed or implied, and accept no responsibility for the completeness or accuracy of the computation.

    BUSINESS TERM LOAN FAQ

    Effective interest rates take into account the compounding or reducing periods during a repayment schedule. Flat rate, commonly known as nominal or simple rate, only factors in the original principal factor and disregards the effects of compounding on a loan. Banks are instructed by the MAS to show all interest rate using EIR.  

    For unsecured term loan facilities, interest rates are typically fixed and not subjected to changes throughout the repayment period. For revolving facilities such as overdraft or trade financing, interest rates might be subject to revision on annual basis, based on prevailing rates. 

    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. 

    Business loan interest rates range from between 7% to 13% p.a. effective rate. Each bank might have different interest rates and terms.