5 Things To Know About Business Loans in Singapore

Getting a business loan in Singapore can feel like an uphill climb — especially if it’s your first time applying.

Many first-time applicants find themselves overwhelmed by the process. From preparing detailed financial statements and drafting a comprehensive business plan to providing full business disclosures, it’s a long and often frustrating journey. And even after jumping through all the hoops, loan rejections are common — sometimes without a clear explanation.

Despite Singapore’s reputation for being a business-friendly environment with various financing options and strong government support for SMEs, access to capital remains a challenge. According to a survey by Nav, 45% of small business owners face multiple rejections, and 23% aren't even sure why their applications were denied.

In this guide, we’ll break down five key things you should know before applying for a business loan in Singapore — so you can improve your chances of getting approved and secure the funding your business needs.

1. Timing of your application.

Your new business might be off to a great start — you’ve got a solid team, a promising product, and strong early growth. Naturally, you’re thinking about raising capital to scale. But if your startup is less than 12 months old, it’s usually too early to secure a business loan from a bank.

Lenders typically want to see a track record of stable revenue, sound financial management, and an experienced leadership team before approving a loan. In Singapore, most banks only begin to seriously consider applications from companies that have been operating for at least 12 to 18 months.

If you’re not quite there yet, consider alternative funding options like crowdfunding platforms, government grants, or angel investors. It’s also a smart move to speak with your accountant — they may have connections with local banks or financial advisors who can guide you toward the most suitable funding route for your stage of growth.

2. Ensure smooth cash flow of your business.

Think about why mortgage lenders ask for payslips — they want proof of consistent income to ensure you can repay the loan. The same principle applies to business loans. Lenders look for stable, predictable cash flow before approving financing.

That’s why we always emphasize to our clients the importance of maintaining clean, accurate financial records. A regularly updated management account isn’t just useful for budgeting and business planning — it’s essential when applying for loans, attracting investors, or preparing for a future sale.

Your financial statements can highlight critical insights, such as overdue receivables, cash flow gaps, and unnecessary expenses you can trim. Staying on top of your numbers shows lenders that you run a financially sound operation — and makes it much easier to get the capital you need when the time comes.

3. Keep your other debt obligations thin

Unless you're earning a seven-figure salary, trying to hold 100 credit cards would raise red flags with lenders — and for good reason. Banks share credit information and will see excessive borrowing as a sign of high risk.

The same applies to businesses. Lenders will assess your existing short-, medium-, and long-term debt obligations before granting new loans. It’s important to work with your accountant to prepare a complete balance sheet that outlines all outstanding debts, then explore ways to optimize your borrowings.

For example, you might renegotiate the terms of an existing loan to extend its tenure, freeing up your ability to take on a new short-term facility from another bank. Closely monitoring your cash flow, keeping loan balances manageable, and making timely repayments are all key to maintaining a strong credit profile and improving your chances of loan approval.

4. Back your loan with collateral

Lenders usually require some form of assurance that the loan will be repaid — and this is especially true for bank loans. Credit and loan officers will carefully evaluate your financial health by reviewing your balance sheet, assessing the consistency of your cash flow, and determining whether the collateral you provide is sufficient to mitigate their risk in case of default.

That’s where a collateral document becomes valuable. This document outlines all the personal and business assets you’re willing to pledge — including property, vehicles, outstanding receivables, or available cash. Having this prepared in advance can streamline the application process and strengthen your chances of approval.

5. Prepare a convincing business plan & good reason

Finally, don’t overlook the importance of a clear, updated business plan. Lenders want to see that you understand your industry, your customers, your cost structure, and your growth strategy. A well-prepared business plan demonstrates your credibility and helps banks evaluate the viability of your business.

In Singapore, the GoBusiness Gov Assist platform offers step-by-step guides on how to create a business plan, apply for financing, and access grants or credit schemes. In addition to core business documents like financial statements, tax filings, your Certificate of Incorporation, and BizFile records (which your accountant can help prepare), be ready to submit relevant personal documents as well — such as your resume, personal tax returns, existing loan details, and recent bank statements.