There is no fixed amount that every SME can borrow.
The amount a business can raise depends on its financial performance, existing liabilities, credit profile, industry, business structure and the lender’s assessment.
For the SME Working Capital Loan, eligible businesses can apply for up to S$500,000 per borrower, subject to the lender’s credit assessment and applicable requirements.
What determines how much you can borrow?
Lenders will generally look at the overall financial position of the business, including:
- Revenue and business performance
- Profitability and margins
- Existing loans and liabilities
- Bank account conduct and cash balances
- Company and guarantor credit profile
- Industry and business activities
- Ownership and Personal Guarantee structure
- The purpose and amount of financing requested
A company with strong financials and manageable existing liabilities may have considerably more borrowing capacity than a company with similar revenue but weaker margins or heavier existing commitments.
Why there is no simple revenue formula
You may see rules online suggesting that a business can borrow a certain percentage of its annual revenue.
These are only rough generalizations.
Two companies with the same annual revenue can have very different borrowing capacity because their profitability, liabilities, bank conduct, credit profile and business circumstances are different.
That is why we do not tell clients that they can automatically borrow “X times revenue”.
The actual numbers need to be assessed.
Can you raise more than S$500,000?
Potentially, yes.
The S$500,000 figure applies to the SME Working Capital Loan. Depending on the company’s profile and financing requirement, other financing facilities may also be considered.
For example, a Business Term Loan or other business financing facility may be considered alongside a Working Capital Loan where appropriate.
The available financing depends on the business and the lender’s assessment.
So how much can your business actually borrow?
This is where a proper assessment matters.
Instead of trying to estimate your borrowing capacity from a generic formula, we look at your:
Financials → Existing liabilities → Bank statements → Credit profile → Financing requirement
From there, we can determine whether there is a realistic financing case and what level of financing may be worth pursuing.
Get your case assessed
At Cornerstone Capital Services, the initial assessment is free.
If you are considering financing for your business, send us your company name, approximate amount required and purpose of funding.
We can review the profile and let you know whether there is a financing case worth pursuing and what financing routes may be suitable.
Speak to us or read How It Works.
