Business Loans

How to Apply for a Business Loan in Singapore?

Lina Tay
October 21, 2022

How to Apply for a Business Loan in Singapore ? (a recap)

As we go into the final quarter of the year, it is always a good time to refresh ourselves on the basics of business finance. So here's a quick recap.

The primary reason for doing business is to earn money through profit. And sometimes, the best way to make more profit is to scale. Often, this requires an injection of additional funds - something that many small, medium, and even large businesses find difficult to meet without external help. External help in the form of business loans. This article will explain how to apply for a business loan, as well as describe basic eligibility criteria and list some of the documents you’ll need. 

Eligibility Criteria

One of the most crucial stages of applying for a business loan in Singapore is the evaluation process. It helps financial institutions determine whether a business can repay a loan. At the most basic level is the eligibility criteria, used to identify borrowers that meet basic requirements, such as being registered in Singapore. A level higher is credit evaluation criteria which helps financial institutions determine the chances of a borrower defaulting on a loan.

 

Criteria at both levels vary from lender to lender and in some cases across different loan products. We took the liberty to list the five things banks consider when reviewing a loan application

 

Ensure You Have all the Necessary Documentation

Proper documentation goes a long way in increasing the success rate of your business loan application. Below, we’ve listed the 5 main documents you’ll need to apply for a business loan in Singapore. 

 

  1. ACRA Business Profile Information 

The Accounting and Corporate Regulatory Authority (ACRA) document helps lenders determine the nature of your business, including directors, shareholders, paid-up capital, and any other information needed to facilitate the loan application. You can download your business information from ACRA

 

  1. Notice of Assessment of all Directors

The second document you’ll need is a Notice of Assessment (NOA) from the company directors going back over the last two years. This document plays a key role in helping lenders determine how much a borrower is eligible to borrow in addition to the loan tenor. 

 

  1. Latest Credit Bureau Singapore Report of all Directors 

The third document you’ll need is the Credit Bureau Singapore (CBS) report. This document informs lenders of any existing loans your company directors might have, repayment histories, as well as unsecured loan amounts. 

 

  1. Last 2 Years’ Company’s Financial Statements

The next document required by lenders is your company’s financial statement going back two years, including profit and loss statements as well as balance sheets. For companies less than 2 years old, first-year statements will suffice. 

 

  1. Bank Statements Over the Last 6 months 

The fifth document you’ll need to apply for a business loan in Singapore is a bank statement going back 6 months from the date of application. It helps lenders determine day-to-day bank account activities, from revenues to expenses and the balance left in the account when the month ends. 

 

  1. Accounts Receivables Ageing List

 The Accounts Receivables aging list is usually optional, but it can help expand the range of loans available to a business. Put simply, this document contains information about your clients as well as the amount you expect to receive for services or products you’ve already provided. This can help with determining eligibility for loans such as invoice financing. 

 

The General 9-Step Process of Applying for a Loan

  1. Application Submission Online or via a Local Branch

Depending on the lender you’ve selected, you can apply online or at their premises. For an online application, you’ll need MyInfo login and your NRIC. 

  

  1. First Call Back

Someone - typically a relationship manager from a financial institution - will reach out to learn more about your business. 

  

  1. Submission of Documents

At this stage, a request will be made for the 6 documents mentioned above. 

 

  1. Second Call Back

A second call back may be initiated in the event that more clarification is needed on the submitted information. 

 

  1. Approval Process

Your assigned relationship manager submits your documents for approval. 

  

  1. Business Loan Proposal

Upon approval of your loan application, your assigned relationship manager will present several loan products aligned with your needs. 

 

  1. Site Visit

If necessary, your relationship manager may request a site visit to gain a clear picture of your business operations. 

 

  1. Document Signing

When the requisite requirements have been met, you’ll be presented with a loan agreement to sign. Be sure to take careful stock of the little details, including loan amount, interest rate, effective interest rate, penalties, and defaults. 

 

  1. Disbursement of Funds

The agreed amount of funds will be disbursed into your corporate bank account. 

 

Ready to Apply for a Business Loan?

Rather than spending a considerable amount of time applying and resubmitting the same documents to different financial institutions, Lendingpot makes it easier to achieve the same result with one single online application. 

With over 45 lenders on our platform, businesses have more options to choose from, receive more competitive rates, and are more likely to get their business loan approved. But don’t take our word for it; register for a new account, submit your loan request, and let the results speak for themselves.


About the author

Lina heads up all things marketing and branding at Lendingpot. With a keen aesthetic eye, she believes in the use of design to communicate with our SME community and aspires to turn Lendingpot into a household name. Out of work, she is an avid camper and appreciator of nature’s best works.

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