Small and medium-sized enterprises (SMEs) form the backbone of Singapore’s economy, generating nearly half of the country’s Gross Domestic Product (GDP) and employing more than two-thirds of the workforce. However, like any business, small businesses often need financial support to run effectively, especially during difficult times.
Small businesses can apply for two types of loans: Temporary Bridging Loans (TBL) and Business Term Loans (BTL).
A Temporary Bridging Loan (TBL) is a government-sponsored loan designed to help a small business meet its short-term working capital needs, especially those resulting from COVID-19. The loan amount is up to $5 million, with the government providing up to 90% and participating financial institutions providing the remaining 10%. The loan is interest-free for the first year and has a low-interest rate of 5% per annum for the remainder of the loan term.
On the other hand, a Business Term Loan (BTL) is a loan that provides long-term financing to support small business expansion and growth plans. Loans have a fixed amortization schedule in which principal and interest are repaid over time (usually one to five years). Loan amounts range from $100,000 to $5 million, depending on the borrower’s needs and ability to repay.
BTL interest rates are typically higher than TBL interest rates and can be fixed or variable. Loans may be secured or unsecured depending on the borrower’s creditworthiness and the financial institution’s policy. Small businesses can use loans to finance business expansion plans, such as opening new branches or purchasing new equipment. It is one of the financial institutions offering both TBL and BTL for sme business loan in Singapore. TBL has a payback period of up to 5 years and is available to SMEs with up to $100 million in annual sales. The loan application process is easy and can be completed online with a one to two-week processing time.
On the other hand, BTL has a payback period of up to 5 years and is available to SMEs with up to $20 million in annual revenue. The business loan OCBC is also easy and can be completed online with 1-2 weeks processing time. BTL offers flexible repayment terms and interest rates to make financial management easier for small businesses.
In summary, Temporary Bridge Loans (TBL) and Business Term Loans (BTL) are viable financing options for SMEs in Singapore. TBL is best suited for SMEs that need short-term working capital to manage business expenses, while BTL is ideal for SMEs that need long-term financing to support business expansion and growth plans. TBL and BTL make it convenient for small businesses needing financial assistance. However, before applying for a loan, small businesses should carefully assess their financial situation and ensure they can repay the loan on time to avoid financial hardship.