How to Get a Business Loan in Singapore

Mihai-Alexandru Cristea 01/08/2021 | 17:10

Whether you are a small business or large LLC company, every business needs capital to fuel growth and power its way into new territories. However monetary institutions in your home country might not be willing to sponsor expansion into new countries. Even though Singapore has a solid business environment and a very stable economy, it can complicate things for lenders to invest in projects that are outside of their legal jurisdiction.


For this reason, a lot of companies that are looking to expand into Singapore, or get a new start there and are looking for lenders to help them get things off the ground.

Overall the business environment in Singapore is very welcoming to new investors, though the reason they have been able to foster so much economic growth is that they keep things simple and have a defined way of doing things. Whatever kind of business you are looking to do in Singapore you can find people who will be willing to finance it.

Here are the fundamental things you need to keep in mind when you go out to get a loan in Singapore.

1.  Credit Score

 Because businesses in the West require individuals and businesses to have a good credit rating, lenders in Singapore also place a lot of importance on this metric. While there is no minimum requirement, the higher your credit score, the better it will be as it will allow you to get more cost-effective financing. A higher credit score reflects a person’s or a businesses’ likelihood to pay back and also shows that the person taking the loan has already paid back successfully in the past. This not only means that more people will be willing to lend you money but they will be willing to give you capital at a lower interest rate. With a better score, you will also be able to secure larger loans.

2.  Institution

When it comes to financing a business the industry that you are in also plays a big role in how easy it is for you to get capital and how much you can get. There are a few different metrics that you can use to evaluate the best moneylender in Singapore but overall you are looking for someone who can give you low rates and a long payback period. If you are confident that you can repay quickly, you can negotiate the rates even lower if you can guarantee a short payback period. Moreover, you can also look for lenders who work with businesses in your industry, as these options will usually offer a lot more flexibility and might be able to meet your needs more efficiently. Rather than getting a simple loan, you could look for a specific kind of asset financing option that will focus the payment towards a certain machine or piece of equipment. 

3.  Terms and Conditions

Different lenders have different terms and conditions. While some of these might be dictated by the nature of your business and the purposes you intend to use the money for, it is also influenced by local regulations. If you are getting financing from a Singapore-based lender, then they will abide by local regulations, which can be different from what is applied in other countries. Even though these are things that no business can do much about, as a business in Singapore, you will have to abide by these local laws. There can be exceptions for certain companies that are headquartered outside of Singapore or businesses in certain industries, but in terms of financing, the laws are relatively similar.

4.  Ownership

Getting financing will also depend on who the owners of the company are and where the company is registered. As a general rule of thumb, if the company does not have 30% or more ownership by Singaporean nationals, it will be difficult to get government-assisted financing. However, private lenders can still easily facilitate businesses owned by foreign nationals or those that have Singaporean owners as a minority. The business structure also plays a big role in ownership so you might want to look at different options depending on the style of your business.

Overall, if you have had success in other countries and your business has a solid track record, finding good lenders should not be a problem. If you are a startup, then the thing you should be focusing most on is your business plan and how efficiently you can show lenders that you know what to do with the money. With no history and no credit rating, the thing you are relying on is clarity in vision and a realistic approach to achieving your business goals.

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Mihai-Alexandru Cristea | 12/04/2024 | 17:28
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