Startup Business Loans: Financing Options for New Companies (2023)


Turning your idea into a thriving business is a challenge in and of itself, but coupled with the challenge of raising capital makes starting a business so daunting. Thankfully, there are plenty of financial options for startup entrepreneurs in Singapore. Entrepreneurs can take advantage of business financing in jump-starting their businesses, purchasing necessary equipment, as well as in expanding operations.

But not all startup business loans are made equal. The government-funded SME Working Capital Loan has a higher borrowing cap of S$500,000 while startup loans from banks have a loan limit of up to S$100,000. As such, choosing the right financing requires careful planning.

Here, we will look into the different types of financing available for entrepreneurs- government-funded and private-funded. Plus, a comparison guide for some of the top banks in Singapore.

What Are the Business Loan Options in Singapore?

In Singapore, entrepreneurs have multiple loan options at their disposal, including government-funded, banks, and licensed moneylender business loans. Additionally, business loans can be secured or unsecured loans, wherein a secured loan requires borrowers to apply with a guarantor or collateral.


SME Working Capital Loan

One of the best financing options you can consider is the SME Working Capital Loan (WCL). It is a government-assisted loan under the Enterprise Financing Scheme which aims to help SMEs with their everyday operational costs and cash flow needs. Under this scheme, the government shares 50% to 70% of the risk with participating financial institutions to help SMEs access unsecured working capital financing in a more affordable way.

With SME Working Capital Loan, entrepreneurs can borrow up to S$500,000 from October 2022 to March 2024. Here are some of its prominent features:

Loan AmountUp to S$500,000 till 31 March 2024
Interest RateBetween 7.5% and 8.5% effective rate
Repayment PeriodUp to 5 years

How to Apply?

Eligibility Requirements:

  • ACRA-registered Sole Proprietorships, Partnerships, Limited Liability Partnerships, and Companies are eligible to apply
  • The business must be registered and operating in Singapore with at least 30% local shareholdings.
  • Group annual revenue of not more than $100 million or group employment size of not more than 200 employees.

Loan applications and approvals of SME Working Capital loans are subject to the participating Financial Institution’s assessment.

Startup SG Tech

This is a Singapore startup competitive grant program to encourage technology start-ups to develop their proprietary technology solutions. It offers early-state financing for developing proprietary technology.

Startups can receive funds in the form of two grants: Proof-of-Concept (POC) and Proof-of-Value (POV). Entrepreneurs may apply for POC or POV grants depending on the stage of development of their technology/concept. The grant cap for POC is S$250,000 and POV at S$500,000.

Startup SG Founder

This program aims to provide mentorship support and startup capital to a first-time business owner with innovative business ideas. With this initiative, first-time entrepreneurs can access funding through startup grants and mentorship from Accredited Mentor Partners (AMPs).

Startup SG Founder offers a platform for matching mentors to start-ups. Additionally, it also funds first-time entrepreneurs of up to S$50,000 by matching S$5 to every S$2 raised by the entrepreneur. You can learn more about this government-assisted program here.

Private Funded

Startup Business Loan from Bank

Startup Business LoanInterest RateLoan AmountLoan TenureProcessing Fee
DBS Business Term LoanUp to 11% p.a.Up to S$500,000Up to 5 yearsNot published
OCBC Business First Loan7.75% to 9.75% (indicative interest rate)Up to S$100,000Up to 4 years2% of the loan amount
UOB BizMoney LoanUp to 10.88% p.a.Up to S$350,000Up to 5 years2% of the loan amount

If your startup business does not meet the stringent eligibility requirements of traditional bank loans, you can also consider taking out a personal loan. With personal loans, you can use the funds for anything you need, including injecting capital into your business.

Another alternative is to take out a business loan with a licensed money lender in Singapore. With a legal lender, you can borrow up to S$200,000 at an interest rate of 5%-15% per month. This is a viable option when you need quick cash and short-term business financing.

How to Apply

The eligibility requirements will vary per bank. However, here are some of the most common criteria using UOB as a benchmark:

  • Sole Proprietor, Partnership, or Private Limited Company
  • Registered and operating in Singapore for a minimum of 1 year
  • At least 30% local shareholding
  • Company’s group annual sales of not more than S$100 million OR company’s group employment size of not more than 200

Document Requirements

The list of required documents may include:

  •  NRIC or other identification details of sole proprietors, partners, principals, and directors
  • Copy of sole proprietors’ or partners’ Income Tax Notice of Assessment
  • ACRA business profile information
  • Latest 2 years’ Notice of Assessment
  • Latest 2 years’ financial statements
  • Latest 3 months’ bank statements
  • Any professional certificate (if applicable) documents related to the establishment of entity, identity, and proof of business address documents

Here is the basic business loan application process using DBS as an example:

  1. Submit your application online
  2. Submit all the necessary documents for fast evaluation and processing
  3. Inform your guarantors about your application
  4. Track your application status online
  5. Once approved, review the terms and conditions of the business loan.

P2P Funding Platform

Peer-to-Peer (P2P) lending is also a viable alternative source of funding for startup businesses. With this option, SME companies can obtain loans from other individuals by connecting borrowers directly to investors. One of the most popular P2P platforms is Funding Societies.

By December 2020, Funding Societies had already funded more than $1.95 billion in loans. With its business term loan, entrepreneurs can borrow unsecured working capital between S$3,000 and S$100,000.


While starting a business in Singapore can be challenging, various funding options can provide the necessary financial support. There are financial options that allow entrepreneurs to raise capital even with no money. The key lies in understanding your business needs, exploring all options, and choosing the one that best fits your business model and growth plan.

Key Takeaways:

  • Most banks require startup businesses to meet minimum revenue requirements to qualify for a regular business loan.
  • There are government-assisted financing schemes you can consider like SME Working Capital Loan that allows you to borrow up to S$500,000 at a more affordable interest rate.
  • You can also consider taking out a business loan from a licensed money lender since they have less stringent requirements than banks and other financial institutions.
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