SME is the abbreviation of “Small Medium Enterprise”. SME business loan is a type of business loan offered by the banks to the organizations which are somewhere between home office- small office, to extend their business.
You’ve started your business from scratch years ago, now it has flourished and now you are thinking of expansion but you lack the capital to do so. SME business loan Singapore has short term funding solutions to your business.
SME business loan comes in many forms i-e SME Micro Loan, SME Working Capital Loan, SME Property secured loan, and so on. Let’s take a look at those exciting business loans.
SME Micro Loan
SME microloan is a government assisted financing scheme. It is easy to get but to qualify you must meet the company’s criteria set. Like your business should be operating and registered in Singapore for 2 years. You must have 10 employees in your company. The annual revenue of your business should be more than S$1 million. Banks offer S$100,000 for this loan but if companies could not qualify, they end up getting S$20,000 or S$30,000. MayBnak2E SME banking in Singapore borrows you SGD 100,000 for four years. It is suitable for funding your upcoming projects and bridging payroll gaps.
Interest rate: 3.2%-4.7% (annual rate)
SME Working Capital Loan
You can grow your business with a collateral-free loan. DBS SME working capital loan funds you SGD 300,000 for up to 5 years. It is collateral-free. Eligibility criteria are almost the same as SME Micro Loan. You need to be in business for a minimum of 1 year. Your business should be registered and operating in Singapore with 30% of the local shareholding. Annual sales should not increase more than S$1 million if 10 employees are working in the company. If your company’s group employment size is 200 than annuals sales can’t increase from S$ 100 million. Borrowing this loan depends on your cash flow, credit status, and profitability.
Interest rate: 6.5%-8.5% (annual rate)
SME Property Secured loan
You are running a small company but you see, this year your company is not profitable. You need some funds to maintain it. If you’ve some property, you’ve got the solution. You can pledge it to the bank and get money. Banks like RHB Singapore, MPM Capital Singapore offers you this loan. This loan can be used for a variety of activities including to: Renovate existing business, modernize your machinery, expand production capacity, and Enhance working capital.
Interest rate: 6% – 12% (annual rate)
SME loans can’t always meet full business requirements and sometimes due to Workload, staff requirements, and other business factors you may need more funding. Banks like Fundopia and SeedIn offers you an Unsecured Business Term Loan (working capital loan) for business expansion. Its eligibility criteria are: Company should be registered in Singapore, at least 1-year business transaction in an authentic bank account, and NRIC of owner or partner.
Interest rate: 8% to 15% (annual rate, it can vary)