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Explore How a Business Loan Can Help SMEs in Singapore

With over 99 per cent of business enterprises in Singapore constituting SMEs, they largely contribute to the country’s economy and employment. You can find SMEs in all industrial sectors, from manufacturing, finance, construction, and e-commerce to wholesale trade, utilities, and other services.

Developing your business is really challenging due to the increasing competition between business enterprises specializing in different areas. Besides intense competition, SMEs have to contend with high operating and rental costs. 

Leveraging business funding for Singaporean business owners is a prominent method to turn their ideas into profitable ventures. Small and medium-sized enterprises (SMEs) in Singapore, in particular, have many chances to improve their cash flow, as well as extend their operations by using business loans from financial institutions, especially banks.

Business loans are an essential instrument for SMEs to realize their organizational objectives, from meeting funding major projects and unforeseen payments to purchasing advanced machines and equipment. Nonetheless, a business loan interest rate is a vital aspect to consider, for it may affect your business’ growth.

It calls for comparing the interest rates before applying for business loans so that you may choose a loan with a competitive interest rate and low risk. Some leading banks offer business loans with a lower interest rate cap to help you have a check on your borrowing costs.

Get to Know Some Features of a Business Loan

You can find banks in Singapore offering business loans to companies, including those that are not eligible for government-assisted financing. 

DBS offers business loans to SMEs, which can easily acquire them on meeting the eligibility requirements. The evaluation of your credit by the bank, however, is what is important. A company with a robust cash flow and annual sales can apply for a business loan in Singapore. SMEs, which are not eligible for government-backed loans, approach private banks, which assist them.

If you meet the requirements, you can borrow up to SGD 500,000 at a competitive interest rate and flexible repayment schedule ranging from one year to five years. Some of the other features of applying for business financing with DBS include:

  • The loan application process is simple, with easy access to information anytime   
  • Low lending rates that help you save money 
  • Online application process

How to Obtain a Business Loan in Singapore?

SME loans in Singapore are exclusively intended to finance company-related endeavours like increasing working capital, expanding operations, and purchasing machinery or other assets. There are various loan options to fit various needs for small and medium businesses.

You have to meet the lender’s requirements and provide documentation of how the money will be used in a business plan to acquire a loan. Further, you should also get ready with the necessary financial papers like bank statements, accounts receivable and payable records, projected turnover, income tax statements, and financial statements. Banks examine them to see whether your company qualifies for a loan.

To obtain a business loan:

  • You should submit your business loan application online, providing the essential details online. You should also provide the latest bank statement for the last three months and financial statements for the past two years.
  • You have to inform your guarantors that your loan application has been accepted by the bank.
  • You can monitor the progress of your application by downloading your bank’s app.
  • If the bank approves your request, they will present you with an offer. 
  • You can accept the offer offline or online with the help of a relationship manager.
  • You receive a notification after the transfer of funds to your company account.

If your startup requires working capital, obtaining a business loan at an affordable interest rate could ease your financial burdens.

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