A working capital loan gives your business a lump sum to fund day-to-day operations, which you then repay in regular instalments over a fixed term. It is not tied to a specific asset and does not have to be spent on one thing. It funds the gap between money going out and money coming in.
The mechanism, step by step
- You apply through a bank, either directly or through a broker who positions the case.
- The lender assesses your financial position, revenue, existing liabilities and credit profile.
- If approved, the lender sets the quantum, the tenure and the pricing. All three are its decision.
- Documentation is signed and the facility is disbursed to your account.
- You repay in instalments across the agreed term.
What it is genuinely for
- Payroll during a slow collection month
- Stock or supplier payments ahead of a season
- Bridging customers on 60 or 90 day terms
- Taking on a larger order than current cash allows
What it is not for
A working capital loan funds a timing problem. It does not fix a structural one. If the business is losing money on every unit sold, borrowing against that makes the problem bigger, not smaller. Some cases genuinely need the cost base and revenue plan looked at before any facility makes sense — that is what our business advisory work is for.
How it compares to the alternatives
A working capital loan is a fixed lump sum repaid on a schedule. An overdraft is a revolving line you dip into. Invoice financing advances against invoices you have already issued. They solve different shapes of the same problem — see the comparison here.
In Singapore specifically
The most common route for an SME is the Working Capital Loan under the Enterprise Financing Scheme: unsecured, capped at S$500,000 per borrower, up to 5 years. Full scheme terms here.
Talk to us about your case
Every business is different, and the only honest way to answer “can we get this funded” is to look at your numbers. Send us your company name, roughly how much you need and what it is for, and we will tell you whether there is a case worth building. Speak to us, or read how it works.
Cornerstone Capital Services Pte. Ltd. (UEN 202622107K) is a business financing consultancy and is not a bank or a licensed moneylender. Loan approval, final quantum, tenure and interest rates are determined solely by the participating financial institutions and are subject to their credit assessment. Scheme figures shown are published by Enterprise Singapore and may change.
