Frequently Asked Questions

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With a business term loan, you are lent a certain sum of money over a period of years, and the interest rate and monthly payments are fixed over the term.

Some business lenders offer access to short-term finance and others will allow you to borrow larger sums over a longer period.

With the rise of peer-to-peer lending and private funding, business owners have more choices for short or long term funding depending on their individual needs.

Business owners can also tap on government backed SME loans such as Spring Singapore micro loan and working capital loan at low-interest rates.

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Who can apply for a business term loan?

Any locally incorporated company with at least 30% local shareholding can apply for a business term loan, no matter how big or how small, although some lenders will only lend to private limited companies, so you need to check this.

Different lenders have their respective industry exclusion list which includes but not limited to:

  • Casinos, gambling &/or gambling equipment
  • Lethal military weapons & equipment
  • Traders in precious metals (retail sales of jewelry is acceptable)
  • Antique dealers
  • Brothels
  • Night Clubs/ Bars
  • Money Lenders/ Pawn shops
  • Money Changers/ Exchange/ Remittance
  • Any other businesses which are involved in illegal activities or which could adversely affect the Bank’s reputation

 

*above served as a general guideline as unlike personal loan, business loan credit assessments are more comprehensive and detailed.

How much can I borrow for a business loan?

Most lenders have a maximum quantum that per company can take up. The amount usually ranges from $300,000 to $500,000 but certain lenders have a higher approval quantum of up to $1,000,000/- or more.

What are the maximum tenures for a business term loan?

The tenures for business term loans can range from 1 to 5 years. The longer your tenure the lower your monthly installments but the more interest you incur.

Are there any additional fees I need to be aware of?

All lenders charged a fixed processing fee of 1-2% and some lenders charge an annual fee thus do scrutinize your offer letter before signing. Late fees and charges are applicable among all lenders.

What are the required documents for submission?

Most lenders will require below standard documents for processing while some may ask for additional documents such as company’s debtor aging list, corporate Notice Of Assessment, GST tax filing, etc.

  • Latest 6 months company’s operating account
  • Latest 2 years company audited/ management report
  • Latest 2 years notice of assessment of directors/shareholders
  • Photocopy of directors/shareholders NRIC (front and back)

What if I have an unsuccessful application in the past? Can I apply again?

Different lenders have different credit criteria; an unsuccessful application in one lender does not mean straight rejection in other lenders. But the rule of thumb is firm can apply for the same lender who rejected their initial application in another 6 months time.

Will taking up a business term loan affect my personal residential purchase in the future?

All business term loans will require company’s director & shareholder to be the personal guarantor. As per MAS notice 645 TDSR (Total Debt Servicing Ratio) guideline, 20% of the monthly repayment instalment of any relevant credit facility in respect of which the borrower is a guarantor will be factor in the TDSR calculation.

How long is the whole application process?

Depending on the lender, it can take as fast as a week approval to as slow as a month approval. Note after approval and signing of the offer letter, it will usually take 3-5 working days for the funds to be disbursed.

So I heard I can apply through CapitalVentures.SG too?

Of course, in our platform beside the transparency of bank interest rates and the useful information on getting a business term loan in our constantly updated blog, we too understand the daunting task of going through the whole rigorous process of documents submission and numerous Q&A for a company to take up a business term loan.

Besides applying yourself, you can choose us to acts as a middleman between you and potential lenders. Our job is to work on your behalf and with several lenders to find the best business term loan lenders who best fit your needs with the lowest rates. We have a well-developed stable of lenders we work with, making your life easier.

We are like your company loan concierge and do all the legwork for you, negotiate terms and make the approval magic happen all for a nominal fee.