Invest in Singapore SME: SME Loans

Small medium enterprise SME loans - Small Business Loans

A small and medium enterprise businesses needs capital to survive. Many SME will scrimp for funds during the down turn to survive and struggle to find funds during the boom cycle to expand. Worst still, during boom times, the cost of funds are much more expensive, this further limits the growth potential of small and medium enterprise.

How do banks determine whether to lend your company the money?

Banks want to lend money to winners or perceived winners. This is because they want to know that they will get their money back.

Banks will put the SME through a lot of tests and requirements to make sure that these SME will survive and that the bank’s funds are safe.

Why do banks insist on the company putting up so much collateral?

I have so much collateral and the bank still ask for this and that proof. This is really annoying. I have more that enough assets to pay off the loan, why does the bank keep harassing me to pay up on time?

The bank is not an asset trader. The bank have no wish to seize your assets or collateral. The bank’s core business is making a spread on the money they lend out. The collateral is used as a backing or guarantee for the money which they lend out. Only in the worst situation will the bank want to sell your collateral or take control of your collateral.

Banks may even want to see your business plan

Some banks may even want to see your business plans. This is because it is not wise for banks to lend to businesses that will fail as this will only cause a credit bubble. This credit bubble will artificially keep an otherwise dead company alive on life support, only to die later when credit is exhausted. Let’s put it bluntly, a company needs to have a good business plan and good execution to survive.

So how does can my Singapore Small Medium size (SME) company qualify for a business loan?

Therefore there are some ground rules which banks set for SMEs in Singapore.

The Basic criteria to qualify for SME Loans are: -

• Registered in Singapore for at least 3 years
• >50% shareholdings held by Singaporeans
• Business run by same director/owner for at least 2 years


Standard Chartered Loan → Spring Singapore Bridging - Micro Loan

Unsecured term loan
Loan amount possible is between $50K - $600K
Loan tenor 1-4 years
Interest rate (effective) 5%-9%, (flat) 2.25%-5%
No processing fee for loan >$100K, else $500 processing fee
No early redemption/partial repayment penalty

Documents required For Application:

• Directors' ID copies
• Last 6 months operating bank account statements
• Last financial year Management A/C (Balance Sheet & P&L) *for loan >100K
• Last 3 years audited/management A/C *for loan >300K

You can contact a Standard Chartered Banker directly at

scb.ben@propertyBUYER.com.sg