Business loan calculator

Borrowing to grow a business is a financial decision dressed up as paperwork. Strip the paperwork away, and the question is simple: what does this loan cost, and can the business afford it? The calculator above gives you the answer in three numbers, in SGD, in seconds. Run different scenarios to understand what best suits your business, before you sign anything.

How to use the business loan calculator step-by-step

Most founders open a loan calculator, punch in a number, and walk away with a monthly payment figure. That’s the least useful way to use one. A business loan calculator works best as a scenario-planning tool. The goal is to stress-test your assumptions before you commit to months or years of repayments. Here’s how to get the most out of it:

Step 1: Enter your loan amount

Start with the amount you actually need. Every extra dollar you borrow increases your total interest cost, so it’s worth being precise. Reference points for Singapore SMEs:

• An e-commerce brand buying inventory: around SGD $50,000
• A SaaS startup extending runway: around SGD $200,000
• An agency building a payroll buffer: around SGD $30,000

If you’re not sure of the exact amount yet, start with your best estimate. You’ll be running multiple scenarios anyway.

Step 2: Add your annual interest rate (EIR)

Enter the Effective Interest Rate (EIR) your lender has quoted - not a monthly rate, and not a flat or advertised rate. EIR is the standardised cost-of-borrowing figure used across Singapore banks and is regulated for transparency. If you’ve only been given a monthly figure, multiply it by 12 before entering it.

If you’re comparing multiple lenders, run the calculator separately for each one using their quoted EIR. The difference in total repayment can be significant.

Step 3: Select your loan term in months

Enter your repayment period in months rather than years. A 2-year loan is 24 months; a 5-year loan is 60 months. EFS-WCL typically caps at 5 years; Fixed Asset Loans can extend longer depending on the asset’s useful life.

Term length is one of the most consequential inputs and it pulls in two opposite directions. A longer term lowers your monthly payment, which feels more manageable, but it increases your total interest cost over the loan life. A shorter term does the reverse: higher monthly payments, but you pay less overall. The right term depends on your cash flow and what the loan is funding.

Step 4: Add your monthly business revenue (optional)

This is an optional input. When you enter your average monthly revenue, the calculator can tell you what percentage of that revenue your loan repayment represents.

That percentage is one of the most practical affordability signals available. If your monthly repayment is SGD $3,000 and your revenue is SGD $10,000, you’re committing 30% of revenue to debt service before paying rent, payroll, or anything else. Seeing that number explicitly, rather than estimating it mentally, often changes how a loan looks on paper.

Step 5: Review all your results together

When you click Calculate, you’ll see a full picture of the loan - not just the monthly payment. Here’s what each output tells you:

Monthly payment: your fixed obligation every month. This is what hits your cash flow immediately and directly.

Total repayment: the complete amount you’ll pay over the loan’s life, principal plus interest combined. This is the real cost of the loan, and it’s often significantly higher than the amount you borrowed.

Total interest: the interest component in isolation, which tells you precisely what borrowing this money costs you.

Interest as a percentage of principal: how much extra you’re paying relative to what you received. A useful gut-check on whether the loan is efficiently structured.

Repayment as a percentage of monthly revenue: if you entered your revenue, this shows how much of your income goes to debt service each month.

Step 6: Run multiple scenarios before deciding

One calculation gives you a data point. Multiple calculations give you a decision. Before you settle on a loan structure, test a few variations:

• Increase or decrease the loan amount to see how your monthly payment and total interest change
• Shorten the term by 12 months and see how much total interest you save
• Enter quoted EIRs from 2 or 3 different lenders (e.g. DBS, OCBC, and a digital lender) side by side to compare the actual cost difference

The best loan structure is the one where the total cost makes sense compared to what the loan generates for your business - and that’s something you can only see clearly by running the numbers.

Common mistakes founders make when using a business loan calculator

Focusing on the monthly payment instead of the total cost

A SGD $2,000 monthly payment sounds reasonable until you realise the loan runs for 7 years and costs SGD $68,000 in interest. Even two loans with the same monthly instalments can vary greatly in their total payment depending on the term and rate.

Not stress-testing cash flow

It’s not enough to assess repayment ability using current income alone. What happens if your revenue drops by 20% for 3 months? If the loan becomes hard to service in that scenario, it’s likely too aggressive.

Entering the wrong rate

When a lender provides a monthly interest rate, make sure you don’t confuse it with the annual rate. Entering 2% monthly as annual interest will produce wrong calculations - the correct annual rate is 2% × 12 = 24%. Similarly, don’t enter a flat rate where the calculator expects EIR; flat rates can be 50–80% lower than the equivalent EIR.

Confusing factor rates with interest rates

Some Singapore lenders, especially in merchant cash advances, quote a factor rate instead of an interest rate. Factor rates are not equal to an annual EIR and cannot be used directly in the equation.

Forgetting fees

Calculating the cost of the loan without considering its processing fee, legal fee, or annual fee doesn’t give the true expense of the loan. Make sure you factor in all the costs during your analysis.

Treating the loan as guaranteed revenue

Loans are not money in the bank. They are debts that need to be paid off with interest. Founders who treat loans as income end up making purchasing decisions that make it hard to repay.

However, if used carefully and wisely, business loans can be a great tool to grow your business.

How to compare business loan offers properly

Most loan offers in Singapore look similar on the headline rate. The real differences sit in the structural details: EIR versus flat rate, processing fees, prepayment penalties, late payment charges. Comparing offers properly means putting all of these on the same line.

EIR versus flat rate

The flat rate is calculated on the original principal across the full tenure, ignoring the fact that you are paying down the principal each month. The EIR is calculated on the declining balance, which is how amortising loans actually work. The flat rate is always lower, often by close to half, and is the figure lenders prefer to put in marketing.

A SGD $100,000 loan quoted at a 4.5% flat rate over 5 years actually amortises at roughly 8.5% EIR. Monetary Authority of Singapore (MAS) requires Singapore lenders to disclose the EIR for a reason. It is the only number worth comparing across offers.

Processing fees

Typical range: 1% to 5% of the principal. Two structures to understand:

• Deducted at disbursement: you receive the principal minus the fee, but interest is calculated on the full principal. A SGD $100,000 loan with a 3% deducted fee gives you SGD $97,000 in hand and interest on SGD $100,000.
• Added to the loan: the fee is rolled into the principal, and you pay interest on the higher total.

Either way, fees can add 0.5% to 1% to the effective annual cost of the loan. A lender at 8% EIR with a 4% processing fee often costs more than a lender at 9% EIR with no fee.

Prepayment penalties

Most Singapore banks charge 1% to 3% of outstanding principal for early settlement. If you plan to repay the loan ahead of schedule (because the asset is sold, a project completes, or stronger cash flow allows it), the prepayment clause matters. Some lenders waive it after a minimum lock-in period of 12 or 24 months.

Late payment fees

Usually a flat penalty plus an interest surcharge on the late amount. Smaller in dollar terms than the other fees, but they compound quickly if cash flow tightens.

An all-in cost comparison

A worked comparison on a SGD $150,000 loan over 4 years:

Offer A wins on the headline EIR but costs SGD $1,236 more once the processing fee is factored in.

Questions to ask every lender before signing

• What is the EIR (not the flat or advertised rate)?
• What is the processing fee, and is it deducted or added?
• Is there a prepayment penalty, and what is the lock-in period?
• What are the late payment charges?
• Are there any annual or administrative fees on top of the EIR?

Put all five answers next to each other before deciding. The cheapest headline rate is not always the cheapest total cost.

The Singapore SME loan landscape

The Singapore SME lending market is more crowded today than it was five years ago. Three lender categories dominate, and each one targets a different borrower profile.

Mainstream banks lead the market. DBS, OCBC, UOB, Maybank, Standard Chartered, and Hong Leong Finance underwrite the bulk of SME term loans in Singapore. They offer the widest product range (working capital, term loans, equipment financing, trade facilities, overdrafts) and the most competitive EIRs for established borrowers. Approval timelines typically run 2 to 4 weeks from documents submitted to disbursement. Banks scrutinise audited financials, time in business, and director credit profiles closely.

Enterprise Singapore's Enterprise Financing Scheme (EFS) is not a lender itself. It is a government risk-sharing programme that sits on top of bank lending. When you apply for an EFS-backed loan, you are applying through one of the participating banks listed above. Enterprise Singapore absorbs 50% of the default risk (70% for businesses incorporated under 5 years), which materially expands the lender's appetite for SME credit. EFS-WCL caps unsecured working capital at SGD $500,000 per borrower group, with EIRs typically running 7.5% to 9%.

Digital lenders and non-bank financiers form the third category. Targeting SMEs that need faster approval or do not meet conventional bank credit thresholds. Approvals can land in 48 to 72 hours. The trade-off is in the rate: digital lender EIRs typically range from 12% to 25%, reflecting the higher risk profile and shorter underwriting cycle.

Choosing between the three is rarely about which is cheapest in absolute terms. It is about matching the lender to your needs. If you have time and a clean financial track record, a bank or EFS-backed loan delivers the lowest cost of capital. If you need cash in days rather than weeks, or if you have been turned down by a bank, a digital lender fills the gap. EFS is the default starting point for established SMEs because the government backing keeps EIRs tight without requiring you to pledge collateral.

The right lender is the one whose pricing matches your urgency and whose criteria match your business profile. Run quotes from at least one in each category before committing.

Types of business loans available in Singapore

Singapore SMEs have a handful of distinct loan products to choose from, each built for a different use case. Picking the right one matters as much as picking the right lender. A working capital loan used to fund equipment, or an equipment loan used to bridge receivables, will cost you more than necessary.

Working capital loans (including EFS-WCL)

The most common SME loan. Used for short to medium-term operational needs: payroll, supplier payments, inventory, marketing spend, and bridging seasonal cash flow gaps. EFS-WCL caps at SGD $500,000 per borrower group, with tenures up to 5 years and typical EIRs of 7.5% to 9%. Conventional bank working capital loans outside EFS run wider rate ranges depending on your credit profile.

Fixed asset loans (including EFS Fixed Asset)

Used to finance long-life assets: machinery, commercial vehicles, factory fit-outs, IT infrastructure. The asset itself serves as collateral, which keeps EIRs compressed at 3% to 6%. Tenures match the asset's useful life, often 7 to 10 years for industrial equipment.

Trade loans

Built for importers and exporters managing the gap between supplier payment terms and customer receivables. The lender typically pays your supplier directly, and you repay once your buyer settles. Up to SGD $10 million per borrower group under EFS, with a maximum tenor of 12 months.

Conventional unsecured term loans

Available from all major Singapore banks without an EFS overlay. Useful when you need flexibility on loan purpose or fall outside EFS eligibility. EIR ranges are wider (6.8% to 18%) because the bank carries the full default risk.

Short-term loans and overdraft facilities

Tenures from 3 to 18 months. Useful for one-off cash flow needs or intermittent credit access. An overdraft only charges interest on the drawn balance, which makes it cheaper than a term loan for businesses that need credit access in bursts.

Quick selection guide

Most SMEs should start by checking EFS eligibility before exploring conventional or digital alternatives. The risk-sharing keeps rates lower for the same borrower profile.

A quick decision checklist before you take a business loan

A loan calculator can’t tell you whether you should take the loan. That’s a judgment call. So before you move forward, run through these questions honestly. The answers tend to surface things that get glossed over in the excitement of accessing capital.

Can you afford the monthly payment in a slow month?

Don’t benchmark against your best month or even your average. Pull up your worst revenue month from the past year, subtract your fixed costs, and see what’s left. If the loan payment doesn’t fit comfortably in that number, the loan carries real risk. Slow months happen, and debt obligations don’t pause when they do.

Does the loan generate measurable ROI?

SGD $50,000 borrowed to buy equipment that produces SGD $120,000 in new revenue is a clear yes. SGD $50,000 borrowed to paper over a cash flow gap, without a concrete plan for what changes afterwards, is a much harder case to make. Before you borrow, define what success looks like in dollar terms. If you can’t, that’s worth sitting with.

Do you have a repayment buffer?

Ideally, you have 2 to 3 months of loan payments sitting in reserve before you start drawing down the loan. It sounds conservative, but early repayment periods are often when revenue is most unpredictable, and that buffer is what keeps a temporary dip from becoming a missed payment.

Does the loan term match what you’re funding?

A 5-year loan to fund a 12-month marketing push creates a structural mismatch. You’re paying for something long after it’s stopped generating returns. As a rule, match the term to the useful life or revenue timeline of what you’re funding.

Have you compared at least 3 lenders?

Business loan EIRs in Singapore can vary by 5% or more across lenders for the same borrower profile - particularly between traditional banks, EFS-backed facilities, and digital lenders. That’s a meaningful difference in total repayment. Use the loan estimator above to plug each lender’s terms into identical inputs, so you’re comparing total cost rather than just headline rates.

Alternatives to a business loan in Singapore

A bank loan is not the only way to fund a Singapore SME. For some funding needs, it is not even the cheapest. 5 alternatives to consider before committing to debt.

1. Government grants

Singapore offers several non-dilutive, non-repayable grants for SMEs. The most relevant:

• Enterprise Development Grant (EDG): co-funds up to 50% of qualifying project costs in core capabilities, innovation and productivity, and market access. Typical approvals take 3 to 4 months.
• Productivity Solutions Grant (PSG): co-funds adoption of pre-approved IT solutions and equipment. Faster approval cycle than EDG but lower per-project ceiling.
• Market Readiness Assistance (MRA): co-funds overseas market expansion activities. Up to SGD $100,000 per company, per new market.

Grants are slower and more competitive than loans, but the capital is free. For funding needs aligned to one of the grant categories, applying in parallel to a loan application is usually worth the effort.

2. Revenue-based financing

Repayments flex with your monthly revenue rather than being fixed. You pay a higher proportion in strong months and less in slow ones. Useful for businesses with genuinely lumpy revenue (SaaS with annual contracts paid upfront, F&B with seasonal cycles, agencies dependent on a few enterprise clients). The aggregate cost is typically higher than a comparable term loan, but the cash flow match can be worth the premium.

3. Invoice factoring and discounting

If your business sells on 30 to 90 day payment terms, invoice factoring lets you receive most of the invoice value upfront from the financier, with the rest paid out (less fees) once your customer settles. Common in trade, logistics, and B2B services. Useful for unlocking working capital tied up in receivables without taking on a traditional loan. Costs typically run 2% to 5% of invoice value per month.

4. Equity Financing

Bringing in equity investors means no repayment schedule and no interest, but you give up ownership and a share of future profits. Singapore has a deep equity ecosystem for SMEs and startups: regional VCs (Sequoia SEA, Vertex, Wavemaker, Openspace), family offices, and government co-investors via Enterprise Singapore's SEEDS Capital. Equity suits businesses where the capital compounds (building product, expanding geographically) rather than where it cycles (inventory, campaigns).

5. Credit lines and overdrafts

A revolving credit facility you draw from and repay as needed. You only pay interest on the drawn balance, which makes it cheaper than a term loan for businesses that need credit access intermittently. Best suited to managing receivables timing or covering short-term mismatches rather than funding a one-time investment.

When does each alternative make sense

A loan is the right answer for many SMEs. But it should be the right answer specifically, not just the default one. Walk through the alternatives before committing to debt.

Use Aspire to support your business

Loans are tools. The best founders use them deliberately and sparingly.

Once you take on a business loan, you’re now managing repayments alongside payroll, vendor payments, and operating expenses - often across multiple currencies and accounts.

Aspire business account gives Singapore founders a platform to manage their budget, track multi-currency cash positions, and stay on top of repayments before they hit. If you’re ready to bring more structure to how your business manages money, Aspire is built for exactly that.