The cost of an SME loan in Singapore is the interest the bank charges plus any fees attached to the facility or to arranging it. For SME Working Capital Loans, current market pricing is generally around 3–4%+ simple interest per annum as an indicative guide, and for certain companies higher, in the region of 3–5%+. The actual rate is set by the participating bank and confirmed only after approval.
What goes into the total cost?
- Interest — charged by the bank. On SME Working Capital Loans it is usually quoted as simple interest per annum.
- Bank fees — some facilities carry processing or other charges. These are set by each bank and appear in its offer.
- Early repayment terms — whether penalties or additional charges apply if you repay early depends on the bank and the facility.
- A broker’s fee, if you use one. At Cornerstone this is a one-time success fee, covered below.
What does “simple interest per annum” mean?
Simple interest is calculated on the amount borrowed rather than compounding on itself. It is the way SME Working Capital Loan pricing is commonly expressed, which makes it easy to estimate the interest on a given amount.
As simple arithmetic: every 1% of simple interest per annum on S$100,000 is S$1,000 a year while the full amount is outstanding. On a loan repaid in instalments the balance falls over time, so the interest does too. This is for illustration only, not a quotation. Your actual rate and repayment schedule come from the bank’s offer.
Why is there no fixed rate?
Banks price each business individually. Financial performance, existing liabilities, credit profile, industry, company vintage, the facility and the tenure can all change the rate offered. Two companies borrowing a similar amount may be priced differently. The full list is in what interest rate you can expect on an SME loan.
What does a broker add to the cost?
Cornerstone Capital Services charges a one-time success fee of 3% to 7% of the financing successfully raised. There is no upfront brokerage fee; the fee becomes payable on successful financing, on the terms in the contract you receive before anything proceeds. The exact percentage is quoted after we assess the case, because a straightforward case and a difficult one are not the same amount of work.
For example, if S$100,000 is raised at an agreed 5%, the fee is S$5,000, charged once. For trade facilities, the fee is a one-time fixed percentage of the maximum approved facility limit, not of the amount drawn. More detail is in how much an SME loan broker charges.
Is the cheapest rate the best deal?
Not necessarily. A lower rate is useful, but securing sufficient financing on suitable terms can matter just as much. When comparing options, look at the financing quantum, tenure, monthly repayment, collateral requirements, the Personal Guarantee, early repayment terms and fees together, not the rate on its own.
Speak to us about your financing requirement
At Cornerstone Capital Services, the initial assessment is free. Send us your company name, approximate amount required and purpose of funding, and we will tell you whether there is a financing case worth pursuing and which routes may be suitable.
Speak to us or read How It Works.
