Business Loans

We review the new OCBC Business Revolving Short Term Loan

Eric Koh
February 2, 2018

(Updated in 2020)

It seems like OCBC is no longer offering all 3 loans in view of the Covid-19 pandemic that is happening right now. For the year of 2020, the government is offering very affordable loans with 90% government risk-sharing.

We believe that these standard loans may reappear in 2021.

Please refer to our updated article
for more information about the interest rate cost of banks.

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 or Long Term?

Let’s compare these common OCBC business loan products:

Business Term Loan Business Short Term Revolving Loan Business Overdraft
Key Characteristics
  • Typically a long term loan
  • Get a sum of money upfront
  • Fixed monthly repayment, equal repayment amount
  • A short term loan
  • Allows multiple withdrawls of min. $25k, up to $200k, whenever needed
  • Repayment period of 6 or 12 months can be chosen
  • Interest is paid on amount withdrawn only
  • A business credit line
  • Allows multiple withdrawl of any amount, up to $200k, whenever needed
  • Interest is paid on amount withdrawn only
Loan Limit $20,000 - $500,000 $25,000 - $200,000 $20,000 - $200,000
Loan Tenor 1 - 5 years A chosen 6 or 12 month repayment period for each withdrawal, facility renewable every year. Renewed annually
Effective Interest Rate 8.88 - 13.88% EIR* 10.88% EIR* 12.88% EIR*
Monthly Minimum Payment Fixed monthly repayment amount Equal repayment amount every month based on selected repayment tenor 20% of outstanding amount (including interest)
Other Fees A one-time 2% facility fee* Annual fee of 1.5% on the approved limit* Annual fee of 1.5% on the approved limit*

*This information is believed to be accurate at the time of writing; However, no claims, promises or guarantees about the accuracy, completeness or adequacy of the information are made.


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 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.

How might the Business Revolving Short Term Loan be useful for me?

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 materials 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.  

Disclaimer: All the information is believed to be accurate; however, no claims, promises or guarantees about the accuracy, completeness or adequacy of the information are made. All information, commentary, recommendations or statements of opinion provided in this article are for general information purposes only. This article is based on information found exclusively on their respective websites. We believe our information is representative. However if there are any errors in our reporting, please contact for rectification. We do not claim to be authoritative.

Request for a Business Loan Now! operates a Business Loan Marketplace that allows an SME to connect to multiple lenders with just one application, allowing the SME to know who its prospective lenders are and the rates that they offer, in a very short time.

Leading digital loan marketplace Lendingpot connects SMEs to its network of 45 lenders comprising relationship managers from banks, financial institutions, and private and peer-to-peer lenders in Singapore. It aims to help SMEs overcome the information asymmetry problem and lack of transparency prevalent in the SME financing sector by offering SMEs financing options such as business term loans, property loans, revenue-based financing, credit lines, working capital loans, bridging loans, invoice financing, and more.

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.

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