Business loan interest rates in Singapore vary based on factors such as market conditions, lender policies, and, even your business finances. This can often make it difficult to identify attractive interest rates.
As a loan marketplace dedicated to helping businesses gain access to financial solutions, and improving outcomes in approval and pricing, we wanted to share some of the prevailing business loan interest rates in Singapore to provide a reference for choosing the right loan and lender.
Read More: Guide To Business Loans in Singapore (Updated for 2024)
Your credit score plays a vital role in determining not only eligibility for a loan but also the interest rate offered. Lenders perceive good credit scores as a reflection of reliable repayment history and financial stability, and as such, offer lower interest rates due to the reduced risk. Conversely individuals with bad credit scores might receive higher interest rates due to the increased risk of a default.
Benchmark rates such as SOR, SIBOR and SORA also serve as a basis for determining interest. It’s worth noting that as of 2024, all new loans will reference SORA. Loans issued before 2022 that are linked to SIBOR or SOR will be transitioned to SORA.
The type of loan, and how it’s structured—that is to say, secured or unsecured—can affect interest rates. For example, a business applying for a secured business term loan might receive reduced interest due to the lowered risk for lenders. In contrast, unsecured term loans tend to have higher interest rates.
Before approving a business loan, lenders will evaluate your business’s financial health by examining statements such as your balance sheet, cash flow statement and profit and loss statement. A profitable business with a steady cash flow may receive more favourable interest rates as opposed to one with financial struggles and inconsistent cash flow.
Inflation, GDP and other economic factors also influence business loans. Higher inflation, for example, will result in higher interest rates to compensate for the reduced purchasing power of money repaid in the future
Read More: 4 Best Business Loans to Start a Business
Compare and contrast loan offers from different financial institutions. A loan marketplace like Lendingpot can make this easy; instead of spending hours visiting multiple websites, by filling out a simple form, you can receive a variety of personalised offers from the multitude of lenders on our platform.
All loan inquiries are recorded by the CBS which are subsequently shared with financial institutions conducting checks into your credit worthiness. Multiple business loan applications suggest that a borrower is likely to be credit hungry.
Taking time and effort to present a complete picture of your business, detailing your financial health and a viable business model, enhances your credibility as a borrower, and can positively influence a lender's decision.
Looking for a business loan? We can help! With a single application, you can gain access to more than 45+ lenders on our platform, each competing to offer the best rates. We take pride in our mission to redefine the lending process, helping businesses get the best outcomes and approvals.
Having trouble getting started? Reach out to us here. Our team is happy to address any doubts you might have or help you navigate the process.
Lina heads up all things marketing and branding at Lendingpot. With a keen aesthetic eye, she believes in the use of design to communicate with our SME community and aspires to turn Lendingpot into a household name. Out of work, she is an avid camper and appreciator of nature’s best works.
