How To Fund Your Small Business In Singapore

How To Fund Your Small Business In Singapore

Got a great idea that could change an industry, or simply looking to break free from the shackles of employment by being your own boss? Whether you have a startup or a regular small business in mind, you’ll need capital for launching and growing your business – or even just to tide you over rough patches.

Here are a few ways you can fund your small business in Singapore.

1. Government grants and equity financing schemes

Singapore places 12th globally in overall startup ecosystem rankings, in part thanks to the significant support provided by the government. Singaporean startups have access to a variety of government grants and equity financing schemes across different industries.

However, each grant or financing scheme has its own set of eligibility requirements. You may not be eligible if you operate in certain industries, such as gambling or tobacco. Some grants can be highly competitive, and your application may need to go through several rounds of evaluation before finally being accepted. They also generally finance just a part of the startup costs needed, so you’ll have to cover the remaining capital.

A few of the grants and equity financing schemes available to aspiring entrepreneurs include:

  • Startup SG Founder – Provides mentorship and capital to first-time entrepreneur; matches S$3 for every S$1 raised by the entrepreneur. You have to apply for Startup SG Founder through an Accredited Mentor Partner, who can also provide other services, such as mentorship or a co-working space for you to operate in.
  • Startup SG Tech – Provides early-stage funding to businesses developing proprietary technology solutions.
  • Startup SG Equity – Co-invests into eligible startups with qualified third-party investors. Provides funding of up to S$2 million for startups classified as “general tech” and S$4 million for startups classified as “deep tech”.
  • Productivity Solutions Grant (PSG) – Provides funding support of up to 70% for SMEs seeking to adopt IT solutions and equipment.
  • Capability Development Grant (CDG) – Provides funding support of up to 70% of qualifying project costs for businesses looking to scale up business capabilities.
  • Enterprise Development Grant (EDG) – The PSG and CDG will be streamlined to form this grant. Business owners will be able to apply this for this grant through the Business Grants Portal, with effect from 4Q 2018.
  • Global Company Partnership (GCP) – Provides funding support of up to 50% (for non-SMEs) or 70% (for SMEs) of eligible costs for businesses seeking to expand overseas.
  • Market Readiness Assistance (MRA) – Provides funding support of up to 70% of eligible costs for businesses entering a new overseas market.
  • Business Improvement Fund (BIF) – Provides funding support of up to 50% (for non-SMEs) or 70% (for SMEs) of qualifying costs for businesses embarking on projects with a tourism focus.
You can search and apply for popular grants through the Business Grants Portal, which is a government initiative that aims to bring government grants for businesses in one place. You’ll need a CorpPass account to use the portal.

  • Grants provide generous funding
  • Equity financing schemes offer mentorship, networking opportunities and other resources to help your business grow


  • High eligibility requirements
  • Government grants have restrictions on what types of businesses can apply
  • Rigorous and time-consuming application process

2. Business loans

If you need a large amount of funding and you can wait (generally a few weeks to a few months) for your application to be processed, you could consider taking out a business loan. Although business loans have high eligibility requirements – you may need to have several years of operations and an annual turnover of hundreds of thousands – they generally offer lower interest rates (around 10% p.a.) than that of personal loans.

Here are some of the common types of business loans offered by banks in Singapore:

Loan typeGovernment-assisted scheme?PurposeAmountTenor
SME Micro LoanYesFund daily operations and cash flowUp to S$100,000Up to 4 years
SME Working Capital LoanUp to S$300,000Up to 5 years
Business Term LoanNoUp to S$500,000Up to 5 years
Property LoanFinance the purchase of industrial or commercial propertiesUp to 80% of the purchase price or valuationUp to 30 years
Equipment LoanFinance the purchase of equipment for use in business operationsUp to 90% of the purchase price or valuationUp to 8 years
Overdraft #rowspan#Provides immediate access to cash when neededUp to S$300,000Revolving line of credit

  • Ideal for large funding needs
  • Relatively low interest rates


  • High eligibility requirements
  • Slow loan processing

3. Personal loans

Personal loans are more accessible than business loans, especially if you’re just looking to start something on the side. To be eligible for a personal loan, you’ll typically need to be above 21 years of age, meet a minimum annual income requirement (usually S$20,000 or S$30,000) and be in good credit standing.

Some personal loans disburse cash as soon as the next working day, making it ideal if you need immediate cash flow.

However, the amount you can borrow under a personal loan is limited – some loans will only allow you to borrow up to 4 times your monthly income. In addition, the interest rates you’ll be paying may go up to around 20% p.a. – these rates could be higher than that of a business loan (around 10% p.a.).

  • Low eligibility requirements
  • Very fast loan processing

  • Can only borrow small amounts
  • May have higher interest rates than business loans

4. Crowdfunding

Crowdfunding raises money through a large pool of individual investors, typically over the internet. The primary types of crowdfunding include:

  • Rewards-based crowdfunding. Popular international sites Kickstarter and Indiegogo use this model, whereby money is invested in exchange for tiers of non-monetary rewards.
  • Donation-based crowdfunding. Investors pool money for charitable causes or to fund local entrepreneurs. Under some sites, such as GoFundMe, investors don’t expect anything in return. Other sites, such as Kiva, will return the amount lent to the investor (if the borrower successfully repays the loan).
  • Equity crowdfunding. Individuals invest in private companies in exchange for a share of ownership or profit. Equity crowdfunding sites in Singapore include FundedHere and Fundnel.
  • Debt-based crowdfunding. Under debt-based crowdfunding, also known as peer-to-peer (P2P) lending, investors pool money to lend to businesses. Popular P2P lending sites in Singapore include Funding Societies and MoolahSense. Both these sites offer business loans and invoice financing.

Crowdfunding can be a good option to explore if your business doesn’t qualify for a bank loan, as P2P loans have lower financial and operational eligibility requirements. If you’re raising funds through rewards-based crowdfunding sites like Kickstarter or Indiegogo, the requirements will be even lower as they don’t require any operational history, although these sites are more suitable for product campaigns or creative ventures.

Crowdfunding is also relative speedy. Some P2P platforms promise application processing times as soon as a few working days. Borrowing from a bank, in contrast, could take up to a few months.

Raising funds through crowdfunding can also be a good marketing tool. Some crowdfunding platforms incorporate social media marketing, which can drive visitors and potential investors to your project. They can also be a good way of gauging public reaction – if your product receives attention and funding on a crowdfunding platform, it could be a sign that it would do well in the market.

However, if you’re thinking of raising funds through P2P lending, be prepared for potentially higher interest rates. P2P platforms tend to charge higher interest rates (up to around 20% p.a.) than banks (around 10% p.a.), as the lower eligibility requirements will expose investors to higher risk. P2P platforms also offer shorter loan tenors (up to 1 or 2 years) than banks (generally up to 5 years).

Crowdfunding also potentially has very little pay-off for the amount of effort you put in. Some platforms won’t disburse any funding if you don’t reach the target funding that was set. Meanwhile, you may have had to invest a lot of time, money and effort in building interest for your campaign.


  • Lower eligibility requirements than bank loans
  • Fast application processing
  • Some crowdfunding platforms can be good marketing tools


  • May have higher interest rates than business loans
  • May receive no funding, even after investing time, money and effort

5. Credit cards through CardUp

The top finance-related challenge faced by SMEs in Singapore in 2017 was delayed payments from customers, which in turn affected cash flow management.

If you’re looking to boost short-term cash flow to bridge gaps caused by customer delays, using your existing credit cards with CardUp could be a cost-effective and hassle-free solution for better cash flow management. CardUp is an online card payments platform that allows you to use your existing credit card to make business payments such as payroll, rent and supplier payments – even if your recipients don’t accept cards.

By leveraging on the interest-free period on your credit card, CardUp helps you extend your business payables by up to 55 days without interest. As long as you have a personal or business credit card, you’ll have immediate access to interest-free, short-term financing without the need for any collateral, documentation or application processing.

Using your credit cards with CardUp also offers these other advantages:

  • Automate payments. Make one-off or recurring payments, as well as schedule payments in advance.
  • Track transactions easily. View and manage all your payments online in a single place, and conveniently export payment history.
  • Earn rewards on credit card spending. Being able to make all your payments via credit card will also allow you to earn more miles, cashback or reward points on your business expenses.

CardUp charges a 2.6% processing fee per payment, making it a cheaper option compared to business loans or overdrafts, which typically come with an additional admin fee or annual fee on top of the interest rate charged.

Of course, the downside to using a credit card to fund your business is that if you can’t afford to repay your bill within the interest-free period, you’ll incur your credit card’s interest rates, which could range from 20% to 26% p.a. – higher than that of a business loan or a personal loan. Additionally, the amount you can borrow will be restricted by your credit limit, though business credit cards typically come with higher credit limits than personal cards. If you’re using a personal credit card, your limit could be four times your monthly income; with a business credit card, your limit may be based on your company’s profitability.

However, if you need short-term financing and are able to pay off your credit card bill within the interest-free period, using your credit cards with CardUp can be an effective way to improve cash flow.


  • Instant access to interest-free financing
  • As long as you have a credit card, no collateral, documentation or application required to access credit
  • Schedule, track and manage business expenses online
  • Earn rewards on credit card spending


  • Will incur high interest rates if you do not repay within the interest-free period
  • Loan amount is restricted by your credit limit

What are your financing needs?

It all boils down to your financing needs: if you need a large amount of funding, consider government grants, business loans or even crowdfunding. For smaller amounts of funding, you can also consider crowdfunding or a personal loan. For short-term financing and to automate business expenses, using CardUp with your existing credit cards is an excellent choice.

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