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Business loans for startups

Looking to give your new business a boost?

With the rise of Singapore’s startup culture, it’s been easier than ever to find business loans for startups in Singapore — as long as you know where to look. Besides banks, licensed moneylenders and other financial stakeholders have started offering startup loans in Singapore. Learn more about the different startup loans you can consider in Singapore, including their costs, features and eligibility requirements.

How does a startup loan in Singapore work?

Startup loans are a type of business loan. Your business borrows money from the licensed lender and then repays the principal fee, alongside interest, over a period of time. Because of the riskier nature of startups, these loans tend to take a longer period of time to be approved. The amount you receive may vary based on the type of loan you apply, the industry you’re in, quality of business fundamentals and the financial background of founding members. Terms for startup loans in Singapore can last from a few months to multiple years.

Regular business loans in Singapore require the business to have been up and running for multiple years prior to the loan. They require documentation including months of past bank statements and reported revenues. Startups, therefore, usually cannot qualify for such loans. Startup loans in Singapore, on the other hand, mainly consider your personal credit and business plan. Some lenders also have minimum monthly revenue requirements and business age requirements.

Options for startup financing in Singapore

You may decide a startup business loan isn’t the best option for your business. What other ways can you finance your startup in Singapore? Here are some ideas to consider:


Microloans are small-dollar financing available to all types of businesses, including startups. They can be used for short-term, low-cost expenses like buying office supplies or stocking up on your first set of inventory. Microloans in Singapore typically offer smaller borrowing amounts and shorter terms than unsecured loans, but they may also have higher rates. Read more on this topic with our clear guide to microloans for SMEs.

Unsecured business loans

An unsecured business loan in Singapore doesn’t require collateral. As a result, you won’t risk losing any of your business’s assets if you can’t pay back the loan. However, these loans tend to be stricter on startups and might be unavailable or dependent on the personal assets of the business owner.

Secured business loans

A secured business loan is backed by your assets as collateral. Such loans are more accessible to borrowers and tend to come with more favourable interest rates. However, startups should be wary of these loans as late repayments could become a very expensive matter.

Personal loans

If you have strong personal credit and a steady source of income, a personal loan could be a way to finance your startup in Singapore. However, personal loans tend to come with maximum borrowing amounts that could fall short of covering your business needs. Additionally, some lenders specify what personal loans can be used for, and this sometimes excludes personal business expenses.

Equity investments

One of the more common ways to fund a startup in Singapore is to take on investors in exchange for equity. Typically, small businesses can get an equity investment through a venture capital firm or an angel investor. While there is no limit on the borrowed amount and no repayment period, you could lose partial control of your company in the process.


Online communities have been flourishing, and raising money online is no longer a rarity. With equity crowdfunding, your company can start an online campaign to receive funding from multiple investors in exchange for partial ownership. An alternative model is rewards-based crowdfunding, where your business offers prizes in exchange for donations. Like a personal loan, crowdfunding might not cover all of your startup costs but could be great for funding a specific project.

Credit cards

An alternative to business loans for startups in Singapore would be startup-friendly credit cards. These can be useful for short-term, day-to-day expenses but watch out for typically high rates of interest.

Government grants

There are plenty of government schemes in Singapore aimed at assisting up-and-coming startups. Such schemes include the ACE Startup Scheme, the Capability Development Grant and Productivity And Innovation Credit. Besides providing funding for eligible startups, these schemes offer an array of benefits including mentorship and corporate tax rebates.

Debt finance versus equity finance for startups in Singapore

The financing options mentioned above consist of debt finance, equity finance and internal funds. Debt involves borrowing money from a business lender, equity finance is provided by an owner or investor, and internal funds are derived from cash flow or profits. In the case of startups, debt and equity financing tend to be the most available funding options. Here are the key factors to consider when differentiating the two:

  • Lending institution. Debt finance tends to come from familiar financial sources including banks, online lenders and credit unions. Equity financing, on the other hand, comes from informal sources like family, friends and crowdfunding platforms.
  • The amount available for borrowing. Debt finances come with a cap on the amount that can be borrowed, while equity finance can amount to millions of dollars.
  • Type of indebtedness. Debt finances involve monetary indebtedness whereby startup borrowers have to repay the principal amount, alongside interest rates, over a period of time. Equity finances do not have to be repaid, but lenders will now own a stake of the company and could even influence key decisions.

What type of costs do startup loans in Singapore have?

Here are potential costs that can be charged to your account when you take up a startup loan in Singapore:

  • Upfront costs. Lenders may charge an establishment fee or application fee when you borrow a loan.
  • Ongoing costs. You may have to pay daily, monthly or annual fees to service the loan. Other ongoing costs may include direct debit fees, transaction fees or line fees.
  • One-off costs. These can include early repayment fees, document fees, amendment fees and other costs associated with managing a business loan in Singapore.

How do I choose the best loan for my startup?

There are so many options for financing a startup in Singapore that it can be tough choosing one. Consider these factors before settling on a startup loan:

  • Loan amount. Avoid borrowing too much – choose a loan amount that meets your business’ needs, and one which you can afford to pay back.
  • Interest rate. Even a seemingly small difference in percentage can have a big effect on how much you end up paying as interest, especially if you borrow a large sum over a considerable period of time.
  • Eligibility criteria. Not all lenders have the same eligibility requirements. Make sure that you and your business meet the lender’s requirements before you apply.
  • Turnaround time. Startup loans typically take longer to process than consumer loans, with some lenders taking up to a month or even more. If you need money in a hurry, consider other forms of credit, such as a personal loan.
  • Collateral. Many startup loans require you to provide some form of collateral. Consider whether you’re comfortable putting down collateral to fund your startup.
  • Repayment terms. Work out your ongoing repayments to see if the loan is competitive and whether your business can manage the repayments.
  • Repayment flexibility. Can you make extra repayments? Are you able to repay early? Find out just how flexible this loan will be and whether it’s right for your startup’s needs.

Bottom Line

There is an array of options for startup financing in Singapore. Business loans for startups in Singapore are simply one potential option that could be useful to you. However, remember that loans always come with a risk of higher costs and defaulting. Since Singapore offers generous government-funded schemes with significantly less risk, you may want to consider government-related financing options for your startup before applying for a startup loan.

Frequently asked questions

How do I know if my business qualifies for a startup loan?

Although terms vary from provider to provider, lenders typically require startups to have good credit, no recent bankruptcies, and a strong business plan.

How can I sign up for business loans for startups in Singapore?

Follow the instructions listed on your desired provider’s website. The process tends to involve online and offline components. You can sign up for a startup loan online, where you will submit all required documentation and specify your borrowing needs. Following this, most lenders require face-to-face meetings with borrowers to discuss their eligibility, loan terms and loan amount.

Can I get a startup loan without a credit check?

Startup loans are considered riskier investments by lenders. As a result, credit checks tend to be a mandatory part of the lending process.

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