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How to Get Small Business Loans with Low or Smallish Revenue in Singapore - 2023 Edition
Introduction: When Seeking Loans with Low Revenue
Starting a business is an exciting endeavour, but it frequently comes with the burden of raising the necessary initial funds. While the traditional way entails enlisting the help of friends and family, there is an alternate option that may provide the cash boost your nascent firm requires. Consider a loan suited to freshly formed businesses or those with low earnings or transaction sighted in their bank statements, avoiding the onerous standards of regular banks which assessed mainly on their cashflow statements.
The stringent lending criteria and credit assessment processes imposed by banks can further hinder small businesses from accessing loans. This is because banks tend to perceive small businesses with low revenue as high-risk borrowers, making it difficult for them to qualify for loans.
In this blog post, we'll explore a financing option that goes beyond the conventional, offering a lifeline to entrepreneurs in the early stages of their business journey. Say goodbye to the limitations of business vintage and hello to a new realm of possibilities for your SME. Let's take a look at the world of startup loans.
Significance of digital banks post-pandemic
In the wake of the COVID-19 pandemic, small and medium-sized enterprises (SMEs) have faced numerous financial challenges. Access to traditional banking loan services has become increasingly difficult, making it more challenging for SME owners and entrepreneurs to manage their businesses effectively.
However, the emergence of digital loan solutions such as ANEXT Bank Business Loan, Maybank E-Financing, Maribank Business Loan, and Elevate by Funding Societies has provided much-needed relief to these businesses.
These loan offering offer an easy and almost instant (quote ANEXT and Maribank Business Loan) that are tailored to the needs of small businesses.
Read also: Which Digital Bank Account Is Most Valued For Buck For SMEs? ANEXT Vs GLDB Vs MariBank
Business Loans That Required Only Singpass Application Without Any Additional Documents (Directors' CBS & NOAs assessments)
ANEXT Bank
ANEXT Bank understands the financial challenges faced by small and medium-sized businesses. That's why they offer a small business loan product that is tailored to the unique needs of SME owners and entrepreneurs.
Read also: Understanding Your Credit Report from Credit Bureau Singapore - Business Owner Edition 2023
ANEXT Bank Business Loan or Pay As You Use Loan
ANEXT Business Loan is a great option for SME owners and entrepreneurs looking for additional funding. The maximum loan amount offered is $300,000, however, loans lesser than $30,000 which require no bank statement analysis can be very beneficial for small businesses with limited revenue. The interest rates are competitive (explained later in details in table) with the traditional banks rate and be tailored to fit the specific needs and financial situation of the business.
The tenor, or repayment period, is up to 5 years, allowing businesses to pay a lower monthly instalment . This can be especially helpful for businesses with low revenue, as it provides some breathing room to repay the loan. The processing time for ANEXT Bank Business Loan is quick (within an hour), which means that businesses can access the funds they need in a timely manner.
ANEXT Qualifying Criteria for <$30,000 Loan:
Accessible Online Application Process (via Myinfo Business)
1. Directors'/ Shareholders' Income must be >$30,000
2. Good Credit Bureau Record (Based on our experience with our clients, CBS rating HH and below tends to get rejected)
Ready to apply? Reach out to us, and we'll guide you to the ideal bank for your financial preferences!
Maybank SME E-Financing
Maybank E-Financing offers a convenient and accessible way for SME owners and entrepreneurs to secure funding for their business needs. With a simple and streamlined online process, this financing solution from Maybank provides a range of financial products to support business growth and expansion.
Range of Financial Products
Whether it's working capital, expansion, or equipment financing, Maybank's E-Financing offers a range of financial products such as Business Term Loan and SME Working Capital Loan tailored to the specific needs of SMEs. From term loans to overdraft facilities, business owners can find the right financing solution for their unique requirements.
5-Year Repayment Option
Maybank E-Financing also offers five-year repayment options to accommodate the cash flow needs of SMEs. With competitive interest rates and repayment terms, businesses can manage their finances more effectively while accessing the necessary funding to support their growth and success.
Maybank E-Financing Qualifying Criteria:
Accessible Online Application Process (via Myinfo Business)
To access these financial solutions, businesses need to meet specific eligibility criteria:
This criteria also applies to up to five Singaporeans/Singapore PRs acting as Partners, Business Owners, Directors, or Shareholders.
Pros:
Among other options here, Maybank E-Financing can give out to S$150,000 based on Notice of Assessments and Credit Bureau assessments only.
This amount stands as the highest among all the current available options.
Drawback:
Although Maybank E-Financing uses the same evaluation as ANEXT Business Loans of Directors' NOAs and CBS, one disadvantage is that the firm must be at least one year old to apply.
The company must be registered with ACRA and have Myinfo Business access, with a "Live" entity status. Eligible entities include Sole Proprietors, Partnerships, or Private Limited companies with annual sales turnover ranging from S$100,000 to S$20 million.
They should have less than or equal to S$2 million outstanding loan/financing with Maybank and must be Singapore-owned, registered entities.
Additionally, businesses should have a minimum of 1 year of incorporation and key man experience.
Timeline is also abit slower than other digital loans here as they typically take 3-5 working days for approval outcome.
Both existing Maybank customers and non-Maybank customers can avail themselves of these opportunities.
Ready to apply? Reach out to us, and we'll guide you to the ideal bank for your financial preferences!
MariBank
MariBank is a digital banking platform designed to meet the financial needs of small and medium-sized enterprises (SMEs) and entrepreneurs.
MariBank is a digital bank, wholly owned by Sea Limited, and licensed by the Monetary Authority of Singapore (MAS).
The Business Loan from MariBank (or rather a revolving credit line) comes with flexible terms and simple interest at 0.5% per month, making it an affordable option for businesses with lower revenue.
You can access financial flexibility with credit limits ranging from S$1,000 to S$200,000, offering the freedom to repay over 3, 6, 9, or 12 months without prepayment fees.
Overall, Mari Business Loan is a valuable solution for businesses with lower revenue, providing them with the financial support and flexibility they need to succeed.
More about MariBank can be read here.
Mari Business Loan
Accessible Online Application Process (via Myinfo Business)
Pros:
MariBank offers a solution called Mari Business Loan, which is specifically designed to help small and medium-sized businesses with lower revenue. This product is advantageous for these businesses because it provides them with Standby Credit Line with $0 Fees.
No processing fees as compared to ANEXT Bank charging a 1% fee for their Pay Per Use product. (Yes, you hear it right, no processing fees!)
For amount less than $30,000, approval is almost instant
Drawback:
Only Single director owning more than 51% local shareholding and Sole- Proprietorship can apply.
While they don't provide business term loans with a fixed repayment schedule, their product proves beneficial for SMEs in need of short-term bridging loans. The loan terms span 3, 6, 8, and 12 months, featuring a bullet payment scheme.
Their interest are also among the highest here with simple interest of 0.5% per month
Loan of less than $$30,000 do not required any bank statements assessment.
Ready to apply? Reach out to us, and we'll guide you to the ideal bank for your financial preferences!
Elevate Credit Line
The Elevate Credit Line, powered and provided by FS Capital Pte Ltd, offers access to additional funds of up to S$20,000. This allows you to improve your cash flow and expand your business. You have complete control over how much you choose to withdraw into your Elevate Account, whenever you need it.
Benefits
One key benefit of Elevate Card is its quick and efficient processing time. This means that businesses can access the funds they need in a timely manner, allowing them to address immediate financial needs or capital expenditures without the hassle of extensive documentation.
Elevate Credit Line offers up to 55 days of interest-free credit, providing the flexibility to fund your business and manage cash flow efficiently. This revolving line of credit allows you to spend funds according to your needs, offering flexibility through FAST transfers or via the Elevate Card.
Comparison Between Banking Products
As a small or medium-sized business owner or entrepreneur, it's important to have a good understanding of the digital solutions offered by banks. Here, we will compare the essential details of different banking products to help you make informed decisions.
| Product | ANEXT Business Loan or Pay As You Use | Maybank SME E-Financing | Mari Business Loan (Revolving Credit Line) | Elevate Credit Line |
| Max Loan Amount | S$300,000 | S$150,000 (Business Term Loan) S$500,000 (SME Working Capital Loan) | S$200,000 | S$20,000 |
| Interest Rates | 8.8% E.I.R p.a. | 9.75% E.I.R p.a. | 0.5% simple interest per month | first 55 days of interest-free 2.5% simple interest per month |
| Tenor | 1 - 6 months (Pay-Per-Use) 1 - 5 years (Pay Monthly) | Up to 5 years | Up to 12 months tenor | n.a. |
| Processing Time | 1-2 hour if loan amount is <$30,000 | 3-5 working days | Instant if <$30,000 | 1 - 3 working days |
Actual interest and/or repayment amounts may differ from, or be higher than, what is shown here.
Read also: Effective Interest Rates vs Simple Interest Rates – What To Take Note Of When Considering A Loan
Conclusion
In conclusion, digital banking solutions offer various benefits for small businesses and entrepreneurs with low revenue. These solutions provide easy access to financial services and are cost-effective, helping businesses save money on banking fees and transactions.
These solutions offer convenience by allowing for online and mobile banking, making it easier for SME owners to manage their finances on the go. Digital banking also provides access to cash flow management tools, lending options, and opportunities for financial growth and expansion.
As such, exploring these digital banking options can be crucial for the financial support and sustainable growth of small businesses.
Looking for a business loan? We aggregate most of the banks in Singapore and we'll guide you to the ideal bank for your financial preferences!
Frequently Asked Questions
How can I qualify for a small business loan with low revenue in Singapore?
To qualify for a small business loan with low revenue in Singapore, focus on building a strong business plan and a good credit history. Lenders will also consider your business's cash flow and the potential for growth.
Read also: Do You Really Need A Business Loan Broker In Singapore? - Loan Broker Singapore
What are the options for small business loans with low revenue in Singapore?
There are several options such as government-assisted financing schemes, microloans from financial institutions, and peer-to-peer lending platforms. These options provide access to capital for small businesses with low revenue.
What if I have a low credit score?
If you have a low credit score, consider applying for a loan with a co-signer or offering collateral to secure the loan. Additionally, work on improving your credit score by paying bills on time and reducing outstanding debt.
What are the common concerns when applying for a small business loan with low revenue?
Common concerns include high interest rates, strict eligibility criteria, and the potential impact on personal finances. It's important to research and compare different loan options to find the best fit for your business.
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