Sometimes called a “first business loan”, a start up business loan in Singapore is akin to a mini or micro version of the regular business loan. It offers borrowers a smaller loan cap and is considerably easier to obtain compared to a regular business loan.
To put things into perspective, business owners only need to be in operation for a few months and do not need a strong financial history in order to borrow.
Keen on getting a start up business loan in Singapore? Below, we have gathered the 5 best places where you can obtain such loans. Find out which one is your best bet.
Do you know that small business owners can tap on government-assisted loans to weather economic uncertainties and finance operational cash flow needs?
With the help of government agencies like Enterprise Singapore (ESG), certain banks are now offering government-backed small business loans to help SMEs gain access to cheaper financing. For such loans, the government acts as a partial guarantor and shoulders up to 70% risk-share in a bid to reduce the risk for banks.
Bear in mind that assistance from the Government doesn’t mean you are free from liabilities. You will still be obliged to pay off your loan according to your loan repayment schedule.
Traditional major banks like DBS, OCBC, UOB and Maybank could be options if you are looking to tap on secure, trusted resources to grow your startup, upgrade equipment or support your daily operational cash flow.
In general, traditional banks aim to offer business owners competitive interest rates to help you maximise your savings. Banks offer both secured and unsecured business loans. For the latter, no collateral is required — you will instead need an eligible Singaporean or Singaporean Permanent Resident to be your loan guarantor.
However, traditional banks tend to be more conservative in their lending practices. This leaves small business owners with few places to turn to to obtain the working capital they need to grow.
Digital financing platforms provide businesses — especially small businesses — with an array of online financing solutions that allow them to grow and thrive. Unlike banks, digital financing platforms are open to most, if not all, registered businesses. For some, funds are raised via investors.
Here are some examples and their benefits:
Aspire doesn’t charge early repayment penalties, so if you can repay your loan early, Aspire may even extend an interest discount to you.
With Validus, small business owners can apply for different types of financing according to their needs, from $100,000 up to a whopping $1 million.
This loan from Minterest grants you access up to $5,000,000 of cash flow, collateral-free, if you are eligible. This digital investment platform lets you raise debt capital by linking your business to the right investors.
Fundraising platforms work in similar ways to big-name crowdfunding names like Kickstarter and Indiegogo. However, the difference lies in that you’re seeking peer-to-peer (P2P) lending for your small business or start-up instead of a particular cool product or project.
Here are some examples:
Funding Societies is one of the largest and most well-funded P2P lending platforms in the Southeast Asia region. From business term loans to invoice financing, SMEs can crowdfund these via Funding Societies. If you have an excellent credit rating, you can expect to secure business loans of up to $1.5 million.
FundedHere is a true blue Singaporean equity and debt crowdfunding platform that has to abide by MAS regulations. Start-ups that use the platform to fund and grow their young, promising businesses can pick from either equity or loan as their preferred funding option. FundedHere will match your start-up with investors.
But take note that they have stringent standards — only 3-5% of the companies assessed eventually get listed on the platform. That also explains why around 66% of campaigns listed on the FundedHere platform have had successful fundraising campaigns!
Did you know licensed money lenders are also a good option for small business owners looking to secure a start up business loan in Singapore? You can get quotes quickly on different money lenders’ 24-hour online platforms for your loans and compare the differences in a matter of minutes.
Loan approval is also fast, and you can possibly get your loans approved even within a day.
While business loans are generally larger than personal loans, the upper limit depends on your financial status, credit history, and credit utilisation. You will need to provide documentation such as proof of ownership, business account balance, and even business plans.
If you repay your loans on time (to avoid incurring late charges and fees), applying for a business loan with a licensed money lender is actually one of the fastest and easiest options in Singapore to get the cash required to fund your operations and help your business to grow.
Looking for a start up business loan in Singapore? At MM Credit, the loan application process is seamless, quick and easy, with fast loan approval and disbursement. Reach out to us now!