How to Pick

the Right Bank

for Your
Business Loan
www.smeguru.sg
 How to Pick the Right Bank for Your Business Loan
Page 1

F
inding the right bank for your SME is a big deal; whether
it’s a small loan or a big one, it’s the start of an important
relationship that will likely last for many years to come.
With all that pressure comes a fair deal of stress, after all, the
bank you choose first is often the bank you’ll stay with. Let’s
break it down and go over the top 10 tips to help you find the
best bank for you in Singapore.

Location, Location,
Location
Once more, location. We’re starting off with
this one because it’s sometimes overlooked,
despite its huge importance. If everything
goes well, you should have your hands full
with running a successful business.

But if you’ve chosen a bank that’s a 45

minute commute each way no matter the
time of day, that’s a huge loss of productivity
for you and your business. If you are in XXXX,
you might not want to travel to XXX all the
time.

Consider how often you’ll need to visit the
bank to draw out cash, have meetings, or
have cheques cashed or issued. If you’re
going to need to visit more than once a week,
make sure they are close by to save you time
and money.
On the other side of the coin is travel. If you
need to travel outside of Singapore often for
business, make sure the bank can handle
your required services when you are out of
town.
 How to Pick the Right Bank for Your Business Loan
Get on Top of Your
Credit Score
Bigger Isn’t
Always Better, but
Size Does Matter
You’ll need to spend some time thinking
about whether you want to go with a small
bank or a big bank.
The big banks like XXXX and XXXXX have
more branches you can visit both inside and
outside of Singapore, more resources, and
more offerings for your business.
Smaller banks like XXXX are sometimes more
tuned into the realities of the local market,
and also might be more willing to look at you
as more than just a credit score.
Page 2
Sometimes, you’re just a number. And like it
or not, a bank usually sees you that way too.
And that three digit number is your credit
score.
Banks can usually be quite picky about what
businesses they give loans to, and your credit
score is the first thing they look at, and often
the last thing they look at too.
To really ensure that you get the banks
competing for your business, make sure your
business’s credit score is as good as possible.
If you’re financing your business through a
personal loan, Singapore banks will check
your personal credit rating too.
If you haven’t already started to improve your
business’s credit score, Do These 6 Things to
Quickly Improve Your Credit Score in
Singapore.
BANK
They may well also be hungrier for your
business and be compelled to offer you a
better deal if it means a long-standing
relationship with a new business.
Perhaps above all, spend time talking to the
people that could be your potential bankers.
Because your future relationship with them is
so important, it pays (literally) to find
someone that you have a good rapport with.
That way, when you accidentally miss a
payment of some sort, you have a better
chance of being forgiven for your
transgression.
 How to Pick the Right Bank for Your Business Loan
Page 3

What Banking
Services Will Your
Business Need?
Loan Options
Let’s start with the reason we’re here, finding
a business loan. Each of the banks offer
different types of loans, some with more
options than others.Take a look at what some
of the current offerings are, and see what
would meet your business’s needs.

Bank Loan Types Offered

UOB  ME Micro Loan

 UOB Business Loan
 UOB BizMoney
 SME Working Capital Loan
 Business Overdraft

DBS  Business Term Loan

 SME Working Capital Loan
 Business Overdraft

Standard Chartered Bank  Business Working Capital

 Business Property Loan
 Business Installment Loan

OCBC  SME Working Capital Loan

 Business Term Loan
 Business First Loan
 SME Venture Loan
 Business Revolving Short Term Loan
 Business Overdraft
 How to Pick the Right Bank for Your Business Loan
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Other Banking Service You might also however need one of the
following services:
Options
Lending Services
Additionally, most banks, no matter the size,
will offer all of the other basic services you  Lines of credit
need for your business:
 Equipment leasing
 Commercial real estate
 Online banking
 Credit card/debit cards
Cash Management
 Chequing accounts
 Savings accounts  Merchant services
 Employee chequing accounts  Wire transfers
 Cheques and cheque books  Wholesale lockbox
 Deposit only cards
Miscellaneous
Consider what benefits each bank offers for
each service. For example, you’ll be using
 Payroll
your chequing account a lot, so will the bank
offer you no/low chequing fees?  Import/export
 Insurance
 Retirement accounts

Discuss your needs with the bank before you

get your loan. It would be a huge
disappointment if you got your loan
approved, but found out later they didn’t
offer a service crucial to your needs.
 How to Pick the Right Bank for Your Business Loan
Page 5

Figure What the True

Costs Are Beyond the
Interest Rate
Business loan interest rates will vary
depending on the bank, and the terms of
your loan. But there will also be
administration costs that the bank will put on
top, for processing your business loan.

Take a look at what the rough interest rates

for working capital loans are for each bank
right now, but pay attention to the column
on the right — that’s the extra fees each bank
will charge, and sometimes it can amount to
a significant sum.

Bank/Loan Annual Interest Rate Administration Fee

OCBC SME Working Capital 5% to 10% 2% of the loan amount

Loan

STANDARD CHARTERED Up to 9% 2% of the loan amount

BANK SME Working Capital (minimum $400)
Loan

DBS SME Working Capital From 7% $500 or 1% of the amount,

Loan whichever one is higher

UOB SME Micro Loan 6% to 8.75% 2% of the loan amount

 How to Pick the Right Bank for Your Business Loan
Skip the Queue and
Have the Banks
Come to You
Relationship with
Benefits
Banks are often in hot competition to get the
best customers, and sometimes a simple low
interest rate isn’t enough to lure potential
borrowers from other banks.
This is when they will roll out the red carpet
of perks, like air travel, hotel accommodation,
or even free appliances.
It all sounds lovely, but keep your eyes on the
prize here. You are out to get the best deal for
your business, not a free microwave. Ask the
bank what they can offer beyond the loan
itself, and how that could help your business.
Page 6
There are no shortage of banks in Singapore,
and traditionally, you’d want to visit each and
every one of them in person to see what they
have to offer you and your business.
That of course, takes a lot of time. Like really,
a lot of time.
Thankfully though, there are now digital
platforms like SMEGuru that can have the
banks actually come to you with loan offers.
Not only that, they will compete for your
business, as they are all working through the
same platform to get you to borrow from
them.
No more trudging around Singapore, you can
get your business loan from the comfort of
your lounge chair.
HOTEL
They might be able to offer payroll services,
reduced insurance rates, or help with your tax
obligations.
This is also a good question to ask if you can’t
choose between two banks.
 How to Pick the Right Bank for Your Business Loan
Page 7

Ensure Your
Digital Freedom
Lining up at the bank is so last century, as
thankfully the banking industry has leapt full
steam ahead into the digital era.

If you value your digital options, such as

banking from your mobile phone, or
anywhere else in the world for that matter,
ask the bank what their digital offerings are.

You might consider some options nice to

have, but others will absolutely be
must-haves for your business.

In the End, Go with Your Instincts

After all of the previous considerations are said and done, you might still be torn as to what
bank to pick. If it’s a razor-thin choice between two banks, trust your gut.

Think about the bank and the people in it, and whether they have a genuine desire to help you
and your business succeed.

Beyond all of the numbers, it’s the people in the bank that will mean the most for your
business’s prosperity.

We hope that you now have a better understanding of how you can pick the best bank for your
business loan as well as your overall business banking needs. If you have any questions about
getting a loan for your business in Singapore, please do contact us, and we’ll make it a priority
to help you out as soon as we can.
 How to Pick the Right Bank for Your Business Loan

Read our article online at:

https://blog.smeguru.sg/how-to-pick-the-right-bank-for-your-business-loan

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