Best Business Loan In Singapore
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Maximum business loan quantum is typically between S$300K to S$500K for most banks. Loan quantum granted is dependent on business's revenue, current debt servicing ratio and credit profile.

Different banks have varying credit policies on the maximum loan quantum granted. Try out our loan assessment tool to find out your indicative maximum loan amount.

Most banks do not offer startup business loan for new company.  The business should be minimally 6 to 12 months old to be eligible. Financing options and quantum are very limited for businesses less than 1 year old.

Most banks prefer at least 2 to 3 years of business history for reviewing credit applications. If the keyman of a relatively new business has at least 5 to 7 years experience managing another business in the same industry as a director, this might help to mitigate the applicant business's lack of operating history.

Different banks require different documents to apply for a company loan. Some common documentations include:

• ID copy of business owner and/or beneficial owners
• Income tax Notice of Assessment (NOA) of business owner/s
• Credit bureau report of business owner/s
• Latest 6 months operating bank statements of the business
• Latest 2 to 3 years financial reports or management accounts of the business
• Latest 4 quarters GST form F5 (if GST registered)
• Debtors and creditors ageing list, if applicable
• Recent awarded contracts, purchase orders, accepted quotations etc
• List of top suppliers and customers 
• Operating premise's proof of address 
• Copy of operating license or professional certificate (for businesses in regulated industries that require licensing, certification or professional accreditation from relevant authorities)
• Memorandum and Articles of Association (for Pte Ltd entities)

Business loan without documents will be assessed based mainly on business owner's credit profile, personal income and business's industry and age. Loan quantum for such loans are typically very low.

You should expect a response between 1 to 2 weeks for an application to be processed once required documents are in order. For weaker or complicated cases, application could take up to 3 to 4 weeks.

An experienced SME finance consultant might be able to help expedite applications' processing time.

• Business term loan: Lump sum unsecured term loan, repaid over equal monthly term instalments, typically between 3 to 5 years. This is the most common form of financing instrument available for most SMEs.
• Trade financing: Revolving working capital credit line facility to finance purchases of inventory and supplies. Trade financing is suitable for businesses that have to stock or trade in physical inventory and goods. 
• Invoice financing/factoring: Short term credit facility to unlock cash in receivables. Useful for B2B businesses that sell to other companies on credit terms.
• Property financing: Mortgage loan to finance purchase of commercial or industrial properties. SMEs can also pledge current property to banks for financing facilities. Commercial property loan is the cheapest form of financing due to collateral nature.
• Equipment/machinery financing: To finance purchase of fixed assets such as machinery and equipment. Typically structured as hire purchase or finance lease.
• Government financing schemes: Government assisted SME loans such as the Enterprise Financing Scheme and SME Working Capital Loan. These schemes typically bear lower interest rate than banks’ commercial loans due to risk sharing mechanism by the government and are typically facilitated by Enterprise Singapore.

There are multiple business loan requirement and credit criteria in banks’ credit assessment. These are not made public and differs from bank to bank. Common factors that banks evaluate for a corporate loan application include:

• Age of business: At least 6 months to 1 year old but most banks will prefer minimum 2 to 3 years.
• Business industry: Different banks might have different outlook on the same industry. The industry you are in could be deemed favorable to some banks, but might be classified as high risk to other banks.
• Sales revenue turnover: Most banks require applicants to have at least a bare minimum annual revenue of $200K. However, many banks do set a higher benchmark and common minimum annual revenue requirement is up to $700K to $1M  for some banks.
• Bank statements: Almost all banks will assess the latest 6 months operating bank statements of applicant company. Figures considered include average daily balances maintained, month end balances, any excess or overdrawn account due to insufficient funds, total crediting amounts per month and cash flow volatility. Most banks typically require a minimum of $10K average daily balances maintained in the latest 6 months bank statements.
• Credit score: The business owner’s personal credit score is a critical component in banks’ credit evaluation. Past adverse defaults, recent discharged bankruptcies and multiple late payment records are flagged out as rejection causes.
• Financial performance: Financial figures commonly assessed include profitability, net profit margin, gearing ratio, inventory cycle and working capital cash flow. Most banks will require the company to be profitable with positive equity in the last financial year.

Although most business financing facilities are offered on unsecured basis, personal guarantee is still a standard requirement for all banks. By default, the business loan guarantor will be the key director and majority shareholder.

Some banks might also request for shareholders with significant shareholdings (i.e. > 25%) to provide personal guarantees.

Obtaining a loan to takeover an existing business is usually not possible. Most banks will require the director to be appointed for at least 1 to 2 years. 

Regardless the credit profile and financial strength of the business, banks will not be comfortable if management of the business is new. 

If you have at least 5 to 7 years of director experience in other business of similar industry, it may improve approval chances.