Maybank SME Business Loan Review –Worth To Take Up?

Maybank SME Business Loan Review –Worth To Take Up?

* Featured image copyright and trademark attributed to Maybank

Are you looking for a Maybank SME business loan? Considering whether if it’s worth to take up a business loan from Maybank? Here’s our review of Maybank’s SME loan to help you make an informed decision.

Aside from Maybank, you can also use our free online loan assessment tool to compare all SME loans in Singapore from 20+ different banks.

Maybank has a long and distinguished history domestically, operating in Singapore since 1960. In 2015, Maybank was identified as a domestic systemically important bank (D-SIB) by the Monetary Authority of Singapore.

That led to the incorporation of Maybank Singapore Limited, a Singapore-incorporated subsidiary with Qualifying Full Bank (QFB) privileges. Maybank Singapore Limited operates its Community Financial Services businesses, which includes their RSME (retail, small medium enterprises) portfolio.

Following the successful full roll out of their Malaysia RSME model in 2013, Maybank has been aggressively pursuing the domestic SME segment.

“Our RSME business was a newly created segment which we identified as having great potential when we started our CFS transformation programme in 2011,” he said. “In line with this, we introduced multi-pronged initiatives such as expanded touch points for improved access; faster loan processing turnaround time; innovative yet simple product packaging and hassle-free processes.”

– Maybank Group Head, Community Financial Services (CFS) and CEO, Maybank Singapore, Mr Lim Hong Tat (March 2016)

In March 2016, Head of Community Financial Services at Maybank Singapore, Mr Choong Wai Hong said Maybank targets to grow their retail SME loan portfolio by 40%.

Since launching RSME domestically in 2014, the RSME client pool has grown 60-70 percent and grown into an 80+ strong team servicing the segment.

It can be seen that Maybank is positioned to be an active player in the SME lending market here in Singapore. Let’s take a look at how their core SME financing product stacks up.

Maybank Business Term Loan

This is one of Maybank’s core SME lending product. Structured as a plan vanilla installment term loan, borrowers can utilize it as a working capital loan.

Upon approval, a lump sum principal loan amount will be disbursed to the borrower with equal monthly repayments made over a fixed term of up to 5 years.

Product: Maybank Business Term Loan
Interest rate: Up to 10.88% p.a
Repayment term: Up to 5 years
Processing fee: Up to 2% of loan amount

This business financing facility is flexible and allows SMEs to utilize it for a variety of purposes such as securing new business opportunities, purchasing equipment or business renovation on existing premises.

Pros of Maybank business loan

Compared to other banks’ business bank loan products, Maybank’s rates and terms are pretty similar.

There is a slight advantage over other banks though, which is Maybank’s FlexiBiz account.

Every bank will require the SME borrower to open and maintain a loan servicing current account with that respective bank which extended the loan facility.

This current account will be used for loan servicing, where monthly installment will be auto deducted from the account upon due date. Initial disbursement of loan will also be credited to the same account.

Most banks current account usually requires an average monthly minimum balance of between $5K to $10k to be maintained. If the required minimum average daily balance is not maintained, a fall-below-balance fee of between $25 to $50 might be deducted monthly.

A common grouse among SME borrowers are that these current accounts are mandated to be set up by the lending bank. The minimum average monthly balance is essentially a soft “earmark” of funds, which if not maintained, will attract additional fall-below-balance fees.

Maybank’s FlexiBiz current account can also be utilized as a loan servicing account for SME borrowers. This account has one of the lowest required minimum average daily balance to be maintained, at just $1000 at this time of writing.

Additionally, there is also interest paid on the account ranging between 0.018% to 0.038% p.a. while most other banks' current account does not pay any interest.

For SMEs whom have presence or are planning to expand regionally within ASEAN, banking with Maybank also entails strategic benefits.

Maybank is the fourth largest bank by assets in South-east Asia and has presence in all 10 ASEAN countries. This places the bank in a favorable position to support and benefit their customers from ASEAN's growth.

Maybank is an active participating financial institution for many government business loan schemes such as the popular Temporary Bridging Loan introduced in Budget 2020.

Cons of Maybank business loan

As stated earlier, there are not much extrinsic differentiating factors between Maybank’s business term loan versus most other major SME lending banks.

In a Business Times report, Marc Leong, head of SME banking at Maybank is quoted that the bank is trying to move more into fee-based income.

In the same article, it is also quoted that the bank will emphasize prudent risk management and their NPL (non-performing loans) ratio for its SME segment is well below the industry average of 5.1%.

Would this indicate a more conservative and prudent credit risk assessment approach for Maybank going forward?

Review Conclusion

In summary, Maybank’s business loan is suitable for SMEs whom are looking for a secondary banker for financing without the need to maintain a high minimum balance in loan servicing account.

Ease of banking convenience and trade financing cross borders across ASEAN is also a key consideration for companies whom have business interests across the region.

Aside from Maybank SME business loan, check out more reviews and financing options from 20+ banks with our SME loan comparison tool!