We review the new OCBC Business Revolving Short Term Loan


*All information, commentary, recommendations or statements of opinion provided in this article are for general information purposes only. We do not claim to be authoritative.

**This is not a sponsored post.

Earlier this month, OCBC announced a new business loan for SMEs known as the Business Revolving Short Term Loan. In simple terms, it allows a business to draw out a sum of money (min. S$25,000), repay it over a chosen period of time (6 or 12 months), and then redraw once the loan has been repaid.

It’s being touted as a way for businesses to tide over short-term cash flow issues, or to raise capital for expansion. But this is only one of many loan packages offered by OCBC to businesses. We’ve pored over the differences between some of the bank’s more common products, to give you an idea about the one that may be most suitable for your business.

Short Term, Long Term

Let’s compare these common OCBC business loan products:




These business loans fulfil different purposes in an SME’s business cycle.

Business term loans are typically used to quickly expand a business’s capabilities. Possible uses include opening another store, acquiring more goods and capitalizing on opportunities to make more money. The loan allows borrowers to repay a relatively low amount every month, in a predictable manner.

On the other hand, a business overdraft is mostly used for short-term working capital requirements. It is designed to be flexible and to allow borrowers to tide over short periods (1 – 2 weeks). For example, an overdraft facility is useful when you need to pay wages before receiving payment from customers. Because of its high-interest rate, it is typically not used over a long period of time.

The new Business Revolving Short Term Loan aims to cover both short and long-term needs, for SMEs who may require the flexibility of an overdraft for needs usually taken care of by a term loan.

Might the Business Revolving Short Term Loan be useful for me?

It might be effective for you if:

1. You need to spend money before the start of a short-term project (3 – 6 months)

This enables you to use the Business Revolving Short Term Loan to finance the purchase of
material for the requirements of this project, without incurring the interest of a term loan with a
minimum tenure of 1 year.

2. You receive milestone payments

If you only expect to be paid for the work done in 6 months’ time, this loan can help cover your
working capital requirement during that time, without incurring the high cost of an overdraft.

3. You do not want to reapply for a loan every year

The Business Revolving Short Term Loan is renewed yearly and you do not need to go through a
lengthy application process each time; there would also be less concern about being ineligible
for the same amount each time you reapply.


The Business Revolving Short Term Loan’s “hybrid nature” is useful for businesses looking for flexibility in borrowing just the right amount needed for short-term projects at a lower cost than the usual overdraft line.


About The Author


Eric Koh is passionate about helping SMEs grow and has spent years interacting with business owners at OCBC and IFS Capital. He is interested in 70s Rock n Roll, the odd novel and copious amounts of historical trivia.

Connect with him via eric@lendingpot.sg

Eric Koh