SME financing glossary.

A

ACRA business profile

A document from ACRA's Bizfile portal that shows a business's UEN, registration date and officers. A Business Profile costs S$5.50; a basic search is free. ^[17]

Explained in: Preparing to apply: documents and red flags

B

Business lending company

A privately owned company, other than a bank or finance company, that lends to businesses from its own funds; sometimes described as a private lender. Some are licensed moneylenders; others lend only to companies and LLPs under an exclusion in the Moneylenders Act. ^[15][32] LEGAL REVIEW

Explained in: Types of business lenders in Singapore

C

Collateral

An asset, such as a property, pledged to a lender as security for a loan. ^[39]

Explained in: Types of business financing in Singapore: unsecured vs secured

D

Digital bank

A bank that serves customers digitally. MAS has issued two digital full bank and two digital wholesale bank licences, with the same scope and requirements as other full and wholesale banks; a digital wholesale bank may serve SMEs. ^[46]

Explained in: Types of business lenders in Singapore

E

EDGE Grant

EnterpriseSG's business grant from 30 September 2026, replacing the EDG, MRA and PSG schemes. It is paid on a reimbursement basis, after the activity is completed and fully paid for. ^[34][35]

Explained in: SME financing in Singapore: the big picture

Effective interest rate (EIR)

The true cost of a loan expressed as an annual rate, taking into account how you repay over time. It lets you compare loans quoted in different ways. ^[10]

Explained in: Flat rate vs effective interest rate (EIR)

Enterprise Financing Scheme (EFS)

An Enterprise Singapore scheme that helps Singapore businesses get financing by sharing the risk of default with participating financial institutions. The lender makes the loan, and the borrower repays 100%. ^[1][2]

Explained in: The Enterprise Financing Scheme (EFS), explained

ESIMS

The Enterprise Singapore Incentive Management System, the portal where a business creates and submits an EFS loan application and chooses which participating lenders to send it to. ^[2][41]

Explained in: The Enterprise Financing Scheme (EFS), explained

Excluded moneylender

A lender that the Moneylenders Act excludes from licensing, for example one that lends only to companies and LLPs. ^[32] LEGAL REVIEW

Explained in: Types of business lenders in Singapore

F

Factoring

A way to get cash for unpaid invoices by selling or assigning them to a provider, which often collects payment from your customer itself. Providers do not always use the term the same way. ^[23]

Explained in: Invoice financing in Singapore, explained simply

Finance company

A non-bank lender licensed under the Finance Companies Act, separate from banks. On 25 Oct 2026 the MAS directory listed 3. ^[30][16]

Explained in: Types of business lenders in Singapore

Flat rate

An interest rate charged on the original loan amount for the whole term, even as you repay it. The effective rate on a flat-rate loan is higher than the advertised rate. ^[10]

Explained in: Flat rate vs effective interest rate (EIR)

H

Hire purchase

Paying for equipment or vehicles over time under a hire purchase agreement. The Hire-Purchase Act's main protections cover consumer goods up to $20,000 (incl. GST) and motor vehicles up to $55,000 (excl. COE), so most business equipment hire purchase falls outside them. ^[37][38] LEGAL REVIEW

Explained in: Types of business lenders in Singapore

I

Intermediary (loan broker or financing consultant)

A firm or person that helps a business compare lenders, prepare documents or apply for financing, but does not lend. The lender still decides whether to lend. ^[2]

Explained in: Types of business lenders in Singapore

Invoice financing

A way to get cash before business customers pay their invoices: a financier advances part of the value of unpaid invoices now, and the advance plus interest is repaid when the customer pays. ^[22]

Explained in: Invoice financing in Singapore, explained simply

L

Letter of credit (LC)

A bank's undertaking, issued at the buyer's request, to pay the supplier up to a stated amount within a set time, once the required documents are presented. ^[55]

Explained in: Types of business financing in Singapore: unsecured vs secured

Licensed moneylender

A non-bank lender licensed to lend to the public. The Registry of Moneylenders publishes the list of licensed moneylenders. ^[15]

Explained in: Types of business lenders in Singapore

M

Monthly rest (reducing balance)

A way of charging interest on the amount you still owe, so interest falls as you repay. For this kind of loan, the effective rate is the same as the advertised rate. ^[10]

Explained in: Flat rate vs effective interest rate (EIR)

N

Non-bank financial institution (NBFI)

A general term for lenders that are not banks, such as finance companies, licensed moneylenders and other non-bank lenders. It is not a licence type in itself. ^[15][30]

Explained in: Types of business lenders in Singapore

Non-recourse

An arrangement where the invoice finance provider takes on the risk that your customer cannot pay, usually only under set conditions, such as goods delivered in good order. ^[23] LEGAL REVIEW

Explained in: Invoice financing in Singapore, explained simply

Notice of Assessment (NOA)

An IRAS income tax assessment. Lenders often ask for directors' or guarantors' NOAs for the latest 2 years; you can view them on myTax Portal for up to 4 years. ^[20][21]

Explained in: Preparing to apply: documents and red flags

O

Overdraft

A facility that lets your current account go below zero, up to an agreed limit. You pay interest on what you use. MoneySense lists fees for going over an approved limit among the costs to check. ^[10]

Explained in: Working capital loans: how they work, what lenders ask for

P

Participating financial institution (PFI)

A bank or other financier taking part in the Enterprise Financing Scheme. PFIs make EFS loans and decide whether to lend. ^[1][2]

Explained in: The Enterprise Financing Scheme (EFS), explained

Personal guarantee

A promise by a director or owner that they may have to repay the business debt personally if the business cannot. LEGAL REVIEW

Explained in: Working capital loans: how they work, what lenders ask for

Property-backed business financing

A business loan secured against a property, such as an office, shop or factory, used to buy or refinance it or to raise working capital. ^[58][59][60]

Explained in: Types of business financing in Singapore: unsecured vs secured

R

Recourse

In invoice financing or factoring, with recourse means you are still responsible for repaying the provider if your customer does not pay. ^[23]

Explained in: Invoice financing in Singapore, explained simply

Revolving credit facility

A limit you can draw on, repay and draw again. Interest is usually charged only on the amount drawn, but some facilities also carry a fee on the limit. ^[39][40]

Explained in: Working capital loans: how they work, what lenders ask for

Risk share

Under the EFS, the percentage of a lender's loss that EnterpriseSG covers if a borrower defaults. It does not reduce what the borrower owes. ^[1][2]

Explained in: The Enterprise Financing Scheme (EFS), explained

S

Secured loan

A loan backed by an asset, such as a property, pledged as collateral. If the loan is not repaid, the asset can be repossessed and sold. ^[39]

Explained in: Types of business financing in Singapore: unsecured vs secured

SME (small and medium-sized enterprise)

The Singapore Department of Statistics defines SMEs as enterprises with operating revenue of not more than S$100 million, or employment of not more than 200 workers. Schemes and lenders can set their own tests. ^[28][2]

Explained in: SME financing in Singapore: the big picture

T

Term loan

A loan of a fixed amount, repaid in instalments over a set period, often fixed monthly instalments. ^[25]

Explained in: Working capital loans: how they work, what lenders ask for

Trade financing

Short-term financing tied to buying stock or to specific trade transactions, such as letters of credit, trust receipts and invoice-related facilities. ^[3][55][56]

Explained in: Types of business financing in Singapore: unsecured vs secured

Trust receipt

A trade facility where the bank pays your supplier and the goods are released to you against your undertaking to sell them and repay the bank from the sale proceeds. ^[56][57]

Explained in: Types of business financing in Singapore: unsecured vs secured

U

Unsecured loan

A loan with no property or other asset pledged. Lenders may still require guarantors. ^[25][39]

Explained in: Types of business financing in Singapore: unsecured vs secured

Y

Young enterprise

In EnterpriseSG's EFS terms, a firm formed within the past 5 years, with at least 1 employee and more than 50% of equity owned by individuals. ^[4]

Explained in: The Enterprise Financing Scheme (EFS), explained