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Working capital finance

A loan to cover your everyday business expenses.

Working capital finance is a type of short-term funding provided to a business that allows it to cover day-to-day expenses. Commonly referred to as SME Working Capital, these loans cover the business’ operational expenses, even if the company isn’t making enough working capital to cover those expenses.

Find out how working capital loans in Singapore work, and if they’re right for you.

Validus Working Capital Loan

Validus Working Capital Loan

  • Access up to S$250,000
  • 48 hour turnaround time
  • Rates from 1.5%

How does working capital finance work?

Whether you’re finding the money to pay employees or tiding over a particularly rough patch, capital loans can help you cover day-to-day business costs. Depending on the lender, a working capital loan is an unsecured business loan — which means you do not have to put down any assets in order to be approved. Rates vary between lenders, especially since some lenders offer risk-based pricing.

What are the main benefits of working capital finance in Singapore?

Here are some benefits brought about by working capital loans in Singapore:

  • Easy online application process. Most lenders allow you to apply online for a business loan. By using SingPass’ MyInfo, you can prefill your details and complete your application in mere minutes.
  • Flexible repayment terms. As lenders are aware this type of loan is for businesses where cash flow ebbs and flows, they generally offer flexible repayment terms.
  • Loan terms. Loan terms vary between 4 to 5 years, so you can choose the term period that suits your business needs best.
  • Quick finance.As money is needed urgently to settle pressing business debts, the funds are usually transferred to your nominated business account shortly after approval. Just how quick the cash disbursement is will vary between lenders, but it can be as fast as one business day.

Comparing some of the working capital finance options in Singapore

At the time of writing, in March 2020, these were some of the working finance plans on the market:

  • DBS Enhanced SME Working Capital Loan: A loan that allows you to service only interest for the first 12 months, thereafter principal and interest for the remaining of loan tenor.
  • OCBC SME Working Capital Loan: A government-assisted loan, enhanced for your business needs.>
  • UOB BizMoney Loan: A working capital loan in Singapore to cover your everyday business needs.
  • Standard Chartered SME Working Capital Loan: A government-assisted scheme jointly administered by Enterprise Singapore, to help local enterprises access unsecured working capital financing in a period of slow economic growth.

Are there any restrictions I should be aware of?

Take note of these restrictions before applying for working capital finance in Singapore:

  • The money must be used on business expenses. Money is only loaned to you on the condition that it will help out your business. Therefore, it must only be spent on essential, business-related expenses such as supplies or employee wages.
  • Your business may not meet the lender’s eligibility criteria. It’s important to be aware of the criteria lenders will be looking for, such as how long your business has been operating and its annual revenue.
  • Not all lenders are flexible with repayment terms. This is something to keep in mind before you apply as you don’t want to be hit with a late repayment fee if you’re unable to make payment on time. So always compare your options and check if another lender is offering more flexible terms.

Is working capital finance right for my business?

Here are a few things to consider when deciding whether a working capital loan is the right credit option for your business.

  • Can my business afford this loan? Like all other loan products, it’s important to consider whether your business will be able to afford to pay off the loan once it’s been approved.
  • Secured or unsecured loan. You can choose between a secured or unsecured loan. It depends whether or not you want to put an asset such as your car, home or a business asset, against the loan you apply for more favourable interest rates or pay higher interest with an unsecured loan.
  • Is there a flexible repayment option? Find out what are the available options for repayment and make sure that the one you opt for will be manageable considering your business’ projected cash flow.
  • What are my options? As working capital finance comes in a variety of options, it’s important to compare and figure out which financing product will work best for your business.

Is my business eligible for working capital finance in Singapore?

Although eligibility may vary amongst providers, here are general requirements for obtaining a working capital loan in Singapore:

  • Must be an ACRA-registered business in Singapore
  • Meet the lender’s minimum revenue requirements (if any)
  • Meet the lender’s criteria for minimum years of operational (if any)
  • The applicant is required to have at least 30% local shareholding
  • Capable of making repayments under the agreed terms

If you run a small business, you can read about your options in more detail with our guide to small business working capital.

Frequently asked questions

How much working capital can I borrow?

Many providers offer loans up to around S$600,000, depending on your business’s financial fundamentals.

What is the typical loan term?

Most loan terms range between 4 to 5 years, so be sure to work with a provider whose loan terms align with your short-term financial projections.

How is interest charged?

You receive a rate when you take out the loan, and that rate is applied to the amount you borrow. Alternatively, the interest rate you receive can be based on the risk your lender is taking by loaning you the money.

What are some alternatives to working capital loans in Singapore?

Depending on the amount of finance you need, you can apply for a bank overdraft, ask for discounted invoices or payment extension from your suppliers, apply for a credit card or take out a personal loan.

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