Guide to SME business loans in Singapore
Guide to SME business loans in Singapore
Guide to SME business loans in Singapore
As a startup founder, SME owner, entrepreneur or small business owner in Singapore, you will likely need extra working capital at some point, whether to cover day-to-day expenses, seize growth opportunities, purchase equipment or expand your operations.
SME business loans provide flexible financing solutions tailored to businesses of all sizes and stages. This guide covers the 7 most common types of SME loans available in Singapore, including working capital loans, start-up loans and commercial property loans, helping you identify the right option for your business needs.
What are SME business loans?
SME business loans (also called small business loans) are financing products designed specifically for small and medium enterprises in Singapore. They support both short-term working capital needs and longer-term investments in fixed assets.
Unlike personal loans, SME loans consider your business revenue, cash flow and growth potential rather than just individual credit history. Many are government-assisted through Enterprise Singapore schemes for eligible SMEs.
7 common types of business loans
1. SME Working Capital Loan
The SME Working Capital Loan under Enterprise Financing Scheme - Working Capital Loan (EFS-WCL) helps SMEs manage daily operations and cash flow.
Key features:
● Maximum: S$500,000
● Tenure: 1-5 years
● Interest: 7-10% p.a.
● Best for: Covering payroll, inventory, rent during growth phases
Established SMEs can apply through OCBC SME loans with fast processing for eligible businesses.
2. Startup Business Loan (Business First Loan)
The Business First Loan is also under the Enterprise Financing Scheme - Working Capital Loan (EFS-WCL) but focuses on startups operating 6 months to 2 years, providing essential early-stage capital.
Key features:
● Maximum: S$100,000
● Tenure: 1-5 years
● Interest: 8-11%p.a.
● Best for: New entrepreneurs, solopreneurs needing working capital
Minimal documentation and fast approval make this ideal for businesses proving their concept.3. Revolving Term Loan
The Revolving Term Loan is a flexible short-term loan option that lets you drawdown, repay, then redraw funds as and when needed.
Key features:
● Maximum: S$200,000
● Tenure: 6- or 12-month repayment period for each withdrawal
● Interest: 8.88%
● Best for: Short-term working capital needs and managing cash flow fluctuations.
A flexible working‑capital buffer to smooth cash flow, draw down when payments are pending or expenses spike, and repay anytime to minimise interest.
4. Invoice Financing
Invoice financing converts unpaid customer invoices into immediate cash, perfect when receivable are typing up your working capital.
Key features:
● Up to 80-90% of invoice value
● Tenure: 30-120 days (until payment)
● Interest: ~7.2% p.a.
● Best for: B2B businesses with slow-paying clients
OCBC's short-term invoice financing charges interest only on funds used.
5. Business Term Loan
The Business Term Loan provides lump-sum financing for specific projects or expansion.
Key features:
● Maximum: S$700,000
● Tenure: 1-5 years
● Interest: 7-11% p.a.
● Best for: Equipment purchase, business expansion, renovations
Suitable for SMEs operating 2+ years with stable revenue.
6. Commercial Property Loan
Commercial property loans finance office, retail or industrial property purchases of up to 120% of the property value. This means additional financing that can be used for other business opportunities.
Key features:
● Up to 120% loan-to-value
● Tenure: Up to 30 years
● Fixed or SORA pricing
● Interest: 2-6% p.a.
● Best for: SMEs buying or refinancing commercial premises and business expansion
Green commercial property loans offer better rates for energy-efficient buildings.
7. Equipment and Machinery Loan
Another type of fixed asset loan that SMEs can apply for is Equipment and Machinery Loans.
Key features:
● Up to 90% of equipment value
● Tenure: 1 year (renewable)
● Lower rates for sustainable assets
● Interest: 4-6% p.a.
● Best for: Manufacturing, F&B, retail upgrading equipment
Pair with Energy Efficient Grant for up to 70% funding support.
Which SME loan is best for you?
Here’s a quick summary of the different types of loans that are available for SMEs in Singapore.
How to apply for SME business loans with OCBC
Typical documents needed
Prepare these common documents to support your application:
● Company bank statements (last 6–12 months) to demonstrate cash flow and transaction history (for new customers only).
● Financial reports or audited accounts (latest 1–2 years’ profit & loss and balance sheet).
● Director’s NRIC (or passport for foreigners) and latest Notice of Assessment (NOA) for personal credit assessment.
● Debtors/creditors ageing list (to evaluate receivables and payables, especially for working capital needs).
For eligible applicants using MyInfo Business or Singpass, many documents are auto-pulled, reducing manual submission.
OCBC application process
OCBC’s digital-first process is designed for busy entrepreneurs:
- Choose your SME loan type. Use the online recommender tool to match your needs (e.g., working capital, commercial property, or start-up funding).
- Apply online (5 minutes for eligible products). Log in via Singpass or MyInfo Business, enter basic business and loan details, and submit, no branch visit required.
- Get status update within hours. Most applications receive preliminary feedback same-day; full review follows quickly.
- Funds disbursed to your business account. Upon approval, funds are credited directly to your OCBC business account, often within a few working days.
This efficient process supports fast access to capital when you need it most.
General eligibility criteria
To qualify for most OCBC SME business loans:
● The business must be registered in Singapore with ACRA and hold a valid UEN.
● The business to be at least 30% local shareholding by Singapore Citizens or PRs.
● The business should have been operating for at least 6 months (some products, like the Business First Loan, accept newer startups).
● Strong repayment capacity, evidenced by positive cash flow, strengthens approval odds.
● Directors/shareholders must be at least 21 years old with no adverse credit history.
Choosing the Right SME Financing for Your Business
SME business loans play an important role in supporting cash flow, funding growth and enabling long-term investment for businesses in Singapore. With a range of financing options available, from short-term working capital loans to longer-term property and equipment financing; understanding your business needs, stage of growth and repayment capacity is key to selecting a suitable loan.
Before applying, it is also important to ensure your business has the right banking setup in place, as approved loan funds are typically disbursed into a business bank account. You can explore OCBC’s range of business accounts to understand eligibility requirements and account features that support day-to-day operations alongside financing needs.
Reviewing your financing and banking options together can help ensure your business is well positioned to manage cash flow and support future growth.
Disclaimer
You may be directed to third party websites. OCBC Bank shall not be liable for any loss suffered or incurred by any party for accessing such third party websites or in relation to any product and/or service provided by any provider under such third party websites.
The information provided herein is intended for general circulation and/or discussion purposes only. Before making any decision, please seek independent advice from professional advisors. No representation or warranty whatsoever in respect of any information provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake any obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein. Any reference to any specific company, financial product or asset class in whatever way is used for illustrative purposes only and does not constitute a recommendation on the same.
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