Government SME Business Loan Enterprise Financing Scheme

The maximum business loan amount differs among various banks and also depends on your business's credit profile (revenue, industry, cash flow position etc.). Revenue would be the main key factor banks use to determine max loan amount.

Most banks’ maximum financing amount granted to SMEs range between $300K to $500K, if revenue meets banks' criteria. However, it is exceedingly hard to secure the maximum amount unless the business has a close to perfect credit profile.

If your main bank is not able to meet your requested financing amount, you can also apply across other banks concurrently to maximize the financing amount you’re targeting.

The typical turnaround time for business loan application is 7 to 10 working days. For cases where credit approvers raise more concerns, might take up to 10 to 20 working days.

The turnaround time takes this long because

1. You may not be familiar with the documents required and the application process.
2. You may have more back-and-forth communication with the bank to get the financing application right.

If you manage to secure a loan approval, funds disbursement will take another 5 to 7 working days from date of acceptance. So from application to receiving funds, expect a turnaround time of between 3 to 5 weeks.

There are close to 20 banks & another 20+ financial institutions providing business loan to SMEs.

There is no definite answer to this because different banks have varying credit criteria and risk appetite.

The best banks are those that credit criteria most suits your business's profile. 

Do you know that some banks shun certain industries whereas other banks might welcome these same industries?

However, most SMEs are not aware which banks are suitable for their respective profile and could waste precious time speaking with banks that are not the right fit.

Aside from traditional mainstream banks, there are also multiple digital banks and alternative financiers offering various financing options to SMEs.

Due to our familiarity with the credit criteria of the various banks, we can help identify the most suitable banks for your company’s profile to ensure highest chances of loan approval at the best terms.

Most SME loan applications can be rejected due to multiple reasons, such as

1. Approaching the wrong banks
2. Business owner’s personal credit profile
3. Limits to financing for existing bankers
4. Weak cash flow

Imagine this scenario: You require funds urgently. Perhaps, to confirm bidding for a tender or seize opportunity for a project .

Yet, when your SME loan application is declined, you will either have to cancel or postpone this project. Your company’s expansion plan might be stalled due to the missed opportunity.

Moreover, when your application is declined, you might not be able to submit another application to the same bank for the next 6-12 months!

It is critical that you identify the right bank to seek financing with and to be able to address the bank’s credit concerns and queries adequately, to minimize rejections. Try out our free loan assessment tool to check your indicative eligibility and see best loan options instantly.

There are more than 20+ banks and financial institution providing SME loans. Their interest rate are different and varies according to factors such as credit profile of applicant and the loan quantum.

SME loan interest rate ranges between 4.2% to 7% simple rate p.a. (EIR 7.75%-12%). It is also prudent to compare widely through multiple banks to secure the best financing deal.

Do note that the lowest rates quote that you receive might not necessarily mean it’s the best financing offer for your business. Check with the banks on their processing fees and prepayment penalties if any, or any other fees that could effectively increase your cost of financing.

Alternatively, consider engaging a loan consultant to help comb through the various banks business loan products to source the lowest rates for your company.

There are various working capital loan products available to meet the different requirements of SMEs

Common SME loan facilities include:

1. Unsecured business term loans
2. Trade financing (Letter of Credit/Trust Receipt)
3. Factoring
4. Receivables financing
5. Asset financing
6. Project based financing
7. SME Working Capital loan

How do you cut through the complexity and technical jargon to determine the most appropriate financing facility to utilize?

A competent financing consultant could help you simplify and identify most useful loan facility for your business. 

If your personal credit rating is bad, your  loan application might be adversely affected.

When you apply for a SME loan, your personal credit record will be assessed by the banks. Your personal credit record will affect your business loan approval chances as well.

It is critical as a business owner to keep your personal credit score acceptable. Any negative impairments on your personal credit will adversely affect your business loan applications, making it very challenging to obtain business financing.

Before you submit a loan application, you can consider purchasing a copy of your credit bureau report and have a loan consultant assess your credit score.

Yes you can, but options are very limited for new start ups. Most banks do not provide start up business loan for newly registered businesses.

Most banks lend on track record and would require applicant company to have at least 1 to 2 years of operational business history before considering extending financing.

If your business is operational for at least 6 months, a competent SME loan broker might still be able to help you secure business financing.

However, expect very limited financing options for a start for very young companies and also smaller financing quantum. If you manage to secure any form of business loans, ensure prompt subsequent repayments to build up a good credit record for your company.

As your business matures and coupled with a good repayment track record, it’ll be easier to source for financing in future from more banks, with more options.