DBS Business Loan vs OCBC Business Loan vs UOB Business Loan

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DBS Business Loan vs OCBC Business Loan vs UOB Business Loan

Let’s compare DBS business loan, OCBC business loan and UOB business loan to review how they stack up against each other.

The 3 local banks are undoubtedly the dominant players in Singapore’s SME financing space. With strong branding and sturdy balance sheets, our 3 homegrown banks continue to dominate Asia’s safest banks rankings year after year.

DBS and OCBC are ranked the top 2 safest banks in Asia and UOB at 4th place for 2016.

dbs business loan, ocbc business loan, uob business loan

Image credit: http://www.straitstimes.com/business/banking/dbs-named-asias-safest-bank-ocbc-at-no-2-and-uob-at-no-4

 

Most Singapore SMEs have at least a banking account with the 3 local banks due to their wide retail banking network and brand name familiarity.

When it comes to applying for a business loan, most SMEs will naturally gravitate towards these 3 banks as well.

How attractive are the 3 local banks business loan offerings compared against each other?

We’ve done some research via mystery shopping calls to their respective SME loan departments and quick checks on their website product page. Here are the results we got:

DBS Business Loan    dbs sme loan

DBS offers an unsecured business term loan for SMEs.

  • Maximum loan amount is $500K.
  • Maximum loan repayment period is 5 years.
  • Interest rate starts from 10.88% p.a.
  • Processing fee 2% of loan amount
  • Repayment method via equal monthly installments calculated on monthly reducing principal
  • No early repayment penalty

OCBC Business Loan   ocbc sme loan

OCBC’s business loan product is similarly termed business term loan as well.

  • Maximum loan amount is $500K.
  • Maximum loan repayment period is 5 years.
  • Interest rate starts from 10.88% p.a.
  • Processing fee 2% of loan amount
  • Repayment method via equal monthly installments calculated on monthly reducing principal
  • Early repayment penalty 3%

UOB business loan   UOB sme loan

UOB’s unsecured term business loan is named ‘BizMoney’:

  • Maximum loan amount is $350K.
  • Maximum loan repayment period is 4 years.
  • Interest rate starts from 10.88% p.a.
  • Processing fee 2% of loan amount
  • Repayment method via equal monthly installments calculated on monthly reducing principal
  • Early repayment penalty 6.88%

local banks business loan compairson

 

Which bank’s business loan should you choose?

Based on the information above:

We conclude that all 3 banks business loans product features are very similar. They are also priced almost identically with all 3 banks’ business loan interest rates starting from 10.88% p.a. EIR.

UOB’s business loan features are less attractive with the maximum quantum of $350K compared to both DBS and OCBC at $500K. UOB’s early loan redemption penalty is also the highest at 6.88%.

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, we think, will not be offered the maximum amount unless financials and all credit aspects are exceedingly strong.

If you:

Intend to redeem your business loan earlier than the approved loan tenure, you should go for DBS’s business loan as it allows early redemption at any time with no penalty.

The above figures are for reference only. Although product features are similar, do note that all 3 banks have different internal credit criteria.

For example:

OCBC will require the applicant company for its business term loan to be registered for minimum 2 years while UOB will require minimum 3 years of incorporation.

Which means for newly registered companies less than 2 years’ incorporation looking for a startup business loan, the 3 business loan products reviewed here might not be eligible.

For new startups registered between 6 months and 2 years, OCBC does offer smaller business loan product called the Business First Loan. 

There are other multiple factors and credit criteria that differ between the 3 banks, including age limit of director, industry nature of business, minimum annual revenue requirements etc…

Aside from our 3 local banks, do you know that there are about 20 different banks, financial institutions and alternative financiers that offer financing for SMEs?

To receive more useful information regarding SME financing like this, do follow us on Linkflow Capital’s Facebook page.

To help you navigate the different criteria and credit requirements of all financiers, you can easily compare all banks’ business loan in Singapore with a free online loan assessment and see all your loan options instantly!

business loan singapore

 

Disclaimer: Linkflow Capital Pte Ltd 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 perpetually 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 April 2017 via their respective websites and hotlines. The information presented here is not meant to be relied on solely. If in doubt, please verify information again with the respective banks or seek professional help.

 

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