The Complete Process

of an SME Loan
Application

www.smeguru.sg
 The Complete Process of an SME Loan Application
Page 1

S
Singapore’s economy is driven by small and medium-sized
enterprises, which make up about 99% of all enterprises.
Thus, SME financing accounts for a significant segment of
the business financing market, where working capital is given
out to companies through different SME loan products.

Apart from the traditional banks and
financial institutions that still provide the
majority of business loans in Singapore,
financial technology (FinTech) is rising and
fast, making its presence known as an
alternative source of business financing.
Today, you have the peer-to-peer lending and
crowdfunding platforms that make the
financing process seamless and much faster.
These financial technology companies are
beginning to make waves among the small
and medium enterprises in Singapore.
With the integration of technology, the
banks, and financial institutions have
developed and progressed, and their systems
and processes have also become quicker and
more efficient through automation.
Thus, to qualify for the SME loans, you just
need to prepare your application to meet all
criteria systematically.

Here is the complete process of an SME loan

application:

1. Stating a proper
business plan
Many banks and moneylenders will demand
a robust financial plan, which will form an
introduction about who you are and what
your business is all about. Be ready to state
your business' goals, mission, and how you
plan to run it to achieve all the objectives A great business plan means that the
stated. business is likely to succeed according to the
mind of the lender.
 The Complete Process of an SME Loan Application
Page 2

2. Stating how you

intend to spend
your finances
Moneylenders usually want to assess how you
intend to pay the loan that you borrowed. In
case you want to invest the fund in
purchasing equipment, you can apply for an
equipment loan.

Or if your plan is to keep the business

running before your debtors pay you, you
may apply for a short-term loan.

When you state what your loan will be used

for, it is easier for the moneylender to
determine whether the amount applied for
will meet all your requirements.

3. Stating the
amount of money
you require
Do thorough research lest you underestimate
or overestimate the amount of money you
require. If you underestimate the amount, it
could lead to financial problems in the future.

Overestimating, again, makes the bank or the

financial institution question whether you
have done methodical research before
writing a business plan.
The Complete Process of an SME Loan Application
Page 3

4. Maintain a
good credit score
Though some licensed moneylenders are
willing to grant you loans despite having a
bad credit score, it is ideal to maintain a good
score.

Moreover, all banks nowadays are required to

verify whether every applicant is eligible to be
given a loan. Thus, make sure to check your
personal credit reports and scores. Also, a
credit score of at least CC should be
maintained.

If your score is low, find ways to raise it before applying for any bank loan.
 The Complete Process of an SME Loan Application
Page 4

5. Assessing all
your lending
options
When you ensure that your credit score is
okay, it is time to research and come up with
a list of banks, moneylenders, or financial
institutions in Singapore that is viable to
provide you the type of loan you require. Go
for one that offers loans at low-interest rates
and offers the most flexible approval
guidelines.

6. Maintaining
proper financial
records
If you are applying for a business loan,
especially from a bank, it will make things
easier when you maintain proper financial
statements.

Banks or other financial institutions want to

verify your balance sheet, cash flow
statements, and income statements to find
out whether you have the ability to repay the
loan or not.

If you have not been maintaining these

records, it is time to start. They could come of
help in the future when you apply for a loan.
 The Complete Process of an SME Loan Application
Page 5

7. Planning a
presentation and
making the
appointment
If you want to convince the loan officer at
your financial institution to consider your
application for a small business loan and give
it a second look, then make sure to present it Furthermore, include an Executive Summary
in the best light possible. as many loan officers read the Executive
Summary first to decide whether they are
It’s vital to set up a presentation of your interested. Take the appointment with your
business plan and application and compose a loan officer and ask for enough time to do a
professional package with a narrative and short presentation, with visual aids, based on
any essential financial statements, your business plan. While doing that, be
spreadsheets, charts, and graphs. concise and organized.

More tips to help you qualify for your

SME loan:
 Make sure that the annual turnover of your company is at least S$150,000.

 Maintain at least S$10,000 in your corporate bank account. Take care not to let it fall below
that amount.

 Your company should turn a net profit. Or numbers should show improvement over the last
two years.

 Reduce your company’s credit exposure. Pay off outstanding loans and other liabilities.
SME Micro Loans

 Be ready to provide a personal guarantee for business loans as it is mandatory for company
Directors in Singapore. To qualify as a guarantor, as a Director, you must have an annual
income of at least S$30,000.
 The Complete Process of an SME Loan Application
Page 6

Wrapping-Up
As you can see, the process of obtaining an SME loan in Singapore is not that difficult. And with
so many financial institutions, banks, and moneylenders out there, you are bound to find one
that will be willing to fund you and meet your requirements. Just ensure to have a proper
business plan, determine how to intend to spend your money, and make an accurate
estimation of the amount you require.

Furthermore, it is essential to keep a good credit score at all times. You can check your credit
score by paying a transactional fee of $6.42 at Credit Bureau Singapore.

Avail only what you can repay back in time, but don’t underestimate the amount lest you end
up in a financial crisis in the future. Hopefully, the guide will help you to avail your SME business
loan and move your business forward.
 The Complete Process of an SME Loan Application

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