SME business lending in Singapore comes down to three doors: a government-backed loan under the Enterprise Financing Scheme (up to S$500,000, with the state covering 50-70% of a default), a bank's own working-capital or term loan (advertised from about 6.8% p.a., EIR closer to 8-11%), or a fintech that prices on cash flow and pays out in a day. Each has a different cost, speed and paperwork load. This guide gives the actual 2026 quantums, rates, facility fees and eligibility rules - checked against EnterpriseSG and the lenders themselves - so you can tell a genuinely cheap loan from a marketed headline rate.
Almost every business loan you will be offered falls into one of three categories, and they are priced and approved on completely different logic.
Government-backed loans run through the Enterprise Financing Scheme (EFS). The bank still lends the money and sets the rate, but EnterpriseSG shares 50-70% of the loss if you default, which lets banks say yes to thinner files. Bank proprietary loans are the lenders' own products - faster to market, but you carry all the risk so pricing reflects that. Fintech and platform lenders (GXS, Funding Societies, GrabFinance) underwrite on transaction data and cash flow rather than years of audited accounts, so they reach younger businesses that banks reject - at a cost.
Picking the right lane matters more than shaving 0.5% off a rate. A six-month-old company will not get a vanilla bank term loan no matter how hard it negotiates, and a profitable five-year-old firm is leaving money on the table if it borrows at fintech daily-fee pricing. Before you compare offers, work out which lane you actually qualify for.
EFS is the backbone of SME business lending here, and the SME Working Capital Loan is its most-used facility. As of June 2026 EnterpriseSG caps it at S$500,000 per borrower, with a S$5 million limit per borrower group and a maximum repayment period of five years. The government risk-share is 50% for established SMEs and 70% for young enterprises (broadly, those incorporated five years or less and majority-owned by individuals). That risk-share protects the bank, not you - you remain liable for 100% of repayment.
To qualify, the business must be registered and operating in Singapore with at least 30% local equity held directly or indirectly by Singapore citizens or PRs, and the group's annual sales turnover must not exceed S$500 million. The SME definition itself is group revenue up to S$100 million or a maximum of 200 employees. EnterpriseSG flagged that EFS enhancements take effect on 1 April 2026 as announced in Budget 2026, so confirm the current quantum on their site before applying.
EFS is bigger than working capital. The same scheme covers a Fixed Assets Loan (up to S$30 million, tenure up to 15 years for buying equipment or premises), Trade Loans for import and export, and project and M&A financing - all sharing a S$50 million exposure ceiling per borrower group. You apply through a participating financial institution, not EnterpriseSG directly, and 15 lenders take part including DBS, OCBC, UOB, Maybank, HSBC, Standard Chartered and Hong Leong Finance.
One nuance people miss: EFS is a guarantee scheme, not a subsidised rate. The bank still prices your loan on its own credit view, so two EFS-WCL offers can differ by several percent. Before signing, run the monthly repayment through a financial health check against your real cash flow, not the optimistic projection.
Banks advertise from around 6.8% p.a. on EFS Working Capital Loans, but the effective interest rate (EIR) - which folds in the facility fee and how interest is calculated on a reducing balance - lands closer to 8-11% p.a. on most proprietary products. The gap between the marketed rate and the EIR is where the real cost hides, so always ask for the EIR in writing.
Facility fees are the second cost most owners forget. A 1.5-2% facility fee on a S$300,000 loan is S$4,500-S$6,000 paid up front, on top of interest. Below is a snapshot of widely available SME loans as of June 2026. Treat every rate as indicative - the binding number is in the Letter of Offer after the bank's credit assessment.
| Lender / product | Max amount | Indicative rate | Tenure | Facility / processing fee |
|---|---|---|---|---|
| EFS SME Working Capital Loan (via banks) | S$500,000 | from ~6.8-9% p.a. | Up to 5 yrs | Varies by bank |
| DBS SME Working Capital Loan | S$500,000 | from 7% p.a. | Up to 5 yrs | 0.6% of approved amount |
| OCBC Business Term Loan | S$700,000 | 7.75-11% p.a. | 1-5 yrs | 1.5% (min S$500) |
| OCBC Business First Loan (new firms) | S$100,000 | 8-11% p.a. | 1-5 yrs | 2% (min S$500) |
| UOB BizMoney (collateral-free) | S$350,000 | around 10.88% p.a. | 1-5 yrs | 2% + S$500/yr |
| Standard Chartered Business Instalment Loan | S$500,000 | board 9.00% p.a. | 1-5 yrs | 2% yr 1 (min S$400) |
| CIMB BizGrow | S$400,000 | around 9.88% p.a. | 1-5 yrs | Varies |
If your business is under two years old or the banks have said no, digital lenders are the realistic option. GXS Flexiloan Biz lends up to S$150,000 from 4.99% p.a. (EIR from 9.32% p.a.) over 2-36 months with no annual, disbursal or early-repayment fee. GXS Capital goes up to S$500,000, prices from 0.7% per month, and can approve in as fast as one day for a private limited company registered six months or more.
Platform lenders tied to an ecosystem are even more flexible on history. GrabFinance Easy Loans offers up to S$100,000 to active Grab merchants with six months of operating history, repaid through daily deductions from Grab earnings and a one-time upfront fee rather than ongoing interest. Funding Societies, the region's largest SME digital financing platform, offers unsecured loans reportedly up to S$1 million with shorter tenures, accepting firms with as little as six months of cash-flow history.
The trade-off is cost. A '0.7% per month' or daily-fee structure can translate into an EIR well into the double digits once you annualise it, especially on short tenures. Convert every fintech quote into an annual effective interest rate before comparing it to a bank loan - a low monthly headline can be more expensive than a higher-sounding annual bank rate. The same arithmetic that exposes a costly personal loan applies here; if you are also juggling personal debt, our guide to debt consolidation in Singapore walks through that same EIR maths.
Lenders assess your business the way you would assess a borrower: can it repay, and what happens if it cannot. Three things move the needle most.
Trading history and turnover set your lane. Banks generally want one to two years minimum and a turnover floor; new firms are steered to OCBC's Business First Loan or fintech products. Cash-flow consistency matters more than a single big-revenue month - lenders read your business bank statements for steady inflows, not spikes. And your personal credit still counts: for SMEs the directors usually give a personal guarantee, so a poor personal credit file or high personal gearing can sink a business application.
It is common, and sometimes sensible, but it is a workaround rather than a strategy. A personal loan or even a line of unsecured credit can fund a brand-new sole proprietorship that no business lender will touch yet, and personal loan rates can undercut a fintech business loan. The downside is that the debt sits on your personal file, eats into your personal borrowing capacity (it counts toward your Total Debt Servicing Ratio if you later apply for a mortgage), and removes the clean separation between you and the company.
Treat a personal loan as bridge funding for amounts under roughly S$50,000 and short horizons. Once the business has six to twelve months of bankable revenue, refinance into a proper SME facility or an EFS loan so the borrowing lives with the entity that benefits from it.
Bank SME loans advertise from around 6.8% p.a. on EFS Working Capital Loans, but the effective interest rate after facility fees usually lands at 8-11% p.a. Fintech products quote low monthly rates that annualise higher, so always compare on EIR, not the headline number.
The EFS SME Working Capital Loan is capped at S$500,000 per borrower with a S$5 million borrower-group limit and tenure up to five years. The Fixed Assets Loan goes up to S$30 million over 15 years, and total EFS exposure per borrower group is capped at S$50 million, as listed by EnterpriseSG in June 2026.
Yes, but not from mainstream bank term loans, which usually want one to two years of trading. New firms can apply for OCBC's Business First Loan, GXS or GrabFinance, or use a personal loan as bridge funding, then refinance into an EFS or bank facility once the business has bankable revenue.
For unsecured SME loans it almost always does. The main directors sign a personal guarantee, which means a default can pursue your personal assets and your personal credit history is assessed during the application. That is why your own credit file and gearing affect a business loan decision.
This is general financial information for Singapore, not personal financial advice. Figures change — verify current rates against the official sources above before acting. See our full disclaimer.