No one likes to be compared and probably will not be making it easy for you to do so.

This is the reason that you will notice that our articles are written, as much as possible, with as many of the other names of the same loan type and terms that might be used, through our careful research (take for example there are 5 different names for gear up loan in another of our article under our Glossary page). In fact, it has become such a nightmare that at times even an experienced relationship manager joining another bank or lender might become confused. is here to change that. When using it, you will notice on your dashboard all their offers are in the same terms/names so that it is easy for you to compare apple to apple. Also, when it comes to comparing loans, there is more than just going for the cheapest interest rate you see. Here are a few other factors that you may want to take into consideration, which will be clearly indicated on your dashboard


Take for example, 2 loans both with a quantum of $10,000 and 1 year in tenure, with the 1st loan at 11% p.a per year without any fees, while the 2nd has a lower interest of 10% p.a, but with an additional of one-time processing fee of $1,000 and 1% annual fee. The total fees of $1,000 and $100 make it slightly more expensive than the 1st, with an Effective Interest Rate (EIR) of 21% as you will pay a total of $2,100 in interest and fees.

There are times a lender may split the fees just to make it harder for you to compare. For one-time fees, they usually call it processing, faculty, set up or admin fee and for usage, they use terms like drawdown, usage, advance fee.

Interest calculation method

Flat, compounding or reducing interest can drastically change how much interest you are actually paying especially for a loan with a long period. For example, a $100,000 (P) loan at 3% p.a (I) with just a 5 years (n) tenure calculated using the 3 methods can cause you to pay more than double the interest amount if not careful:




Interest is 3% x 5 years x $100,000 = $15,000

Interest is P [(1 + i)n – 1] or $15,927.41

Interest x the reducing principal as it gets paid off each month (and times not the full $100,000) and works out to be $7,820

Unlike a saving account or investment and calculating using the compounding period is quite necessary - our Financing Partners will convert any compounding interest to flat when they quote you, to keep things simple. 

Repayment term & Lock-in period

For example, if you expect cashflow to be tight over the next few months but expect completion of a large order or a sale of a property later which will allow you to easily repay your loan, an interest servicing repayment means you only have to service your interest monthly, making your initial monthly repayment much more affordable. However, if you have a long lock-in period when your cash flow is freed up, you will pay an early repayment fee to discontinue the loan. (To find out more on the various repayment term types, please refer to another article of ours.) If you are getting a property loan, having a long lock-in period may mean if you believe the interest rate will be trending downward, you might not be able to take advantage of that and refinance your loan to a new lender without paying a penalty.

Some lenders make it hard for you to compare the early repayment fee between loans by having a 2-tier early repayment fee calling the 1st one, for example, the more familiar “Early Repayment Fee payable within 6 months at 10% of principal sum “ which you will then tend to focus on – and may overlook later on the page, for example, a, “Early Redemption Fee payable after 6 months but within 2 years at  5%”

As most lenders only have a single lock-in period, for simplicity your dashboard’s lock-in refers to the final period free of any penalty whereas secondary ones, they would state in under the terms and condition column

Block period

Take for example a 45 days loan; a lender may calculate it as 45 days, 7 weeks or 2 months. A $100,000 invoice financing at 3% per month interest will work out to be $4,500 for one with interest calculated daily or $6,000 for another calculating it as 2 months - 33% more for the 2nd even though both on paper states the same 3% per month.


Naturally, the duration of the loan is another important factor. The same quantum divided over a long period means smaller monthly instalments and easier for the business to cope with, with the trade-off being more interest paid. Note for overdrafts and for loans such as Merchant Cash Advance, where there may not be a fixed tenure especially if it is on a revenue-based repayment model - the Financing Partner may not enter a tenure.

In summary

The above factors will be clearly indicated on your dashboard, using the same jargon and product names, regardless of what a lender calls them, allowing you to easily compare and Find The most suitable Loan for you.

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EFS is a series of schemes not a loan type. For example. The "SME Fixed Asset" is essentially a scheme for 3 types of loans: Hire Purchase, Construction Loan and Property/Land Loan. While the "Project loan" also has construction loan, it is meant for construction enterprise, in other words a scheme for the construction industry. Please visit ESG's website for the most updated information. We included it as a loan type on this page as many users are used to looking for it as a "loan type".

Please instead continue by selecting the actual loan type that you are looking for. And if you like to, you can get a quote from other non-Participating Financial Institutes as well. This can be done on the Select Financing Partner page, where you can decide which lender you would like to enquire with. Or only to Participating Financial Institutes who may offer a different/better set of terms due to the risk sharing with Enterprise Singapore but may also have more stringent criteria as a result.

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A Working Capital Loan or WCL for short simply means a short-term loan that is used for financing a company's everyday operations. These loans are usually not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company's short-term operational needs.

Some lenders may call it a business term loan even though a term loan simply means a loan where the lender provides cash upfront and receives that money back through a series of smaller payments over a fixed certain amount of time(term) and can technically refer to a number of loan types.

Technically, a working capital loan is more of a purpose than a loan type, as one can use a number of loan types to serve their need for working capital. E.g if you think about it, if you are starting a business - you can actually use your savings or even a personal loan as your working capital. However, in this region, a working capital loan is well understood to be a term loan meant for general-purpose working capital and thus you will see using this term under your select loan type page. 

With you don’t have to worry about all the various terms used by different lenders - reach all our lending partners with just one submission to compare and Find The Loan you need. If you are looking for a loan, not using our platform and are concerned that you and your own relationship manager might not be talking about the same thing, send our glossary page to them!

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Alternative finance refers to a broad range of financial instruments and platforms that provide financing options outside of traditional banking channels. Depending on who you speak to, it can range from Venture Debt to Crowdfunding, Stock financing to Revenue-Based Financing. In fact, these days, alternative finance can start to be a misnomer as even some banks and financial institutes are starting to offer Venture debts and Stock Financing. However, Revenue-Based Financing is nearer to being an investment vehicle and Crowdfunding is more of matchmaking to investors, & banks are unlikely to move into offering them any time soon or at least not under their investment banking arms.

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bridging loan as the name implies is a loan to “bridge” the time between the proceeds from the sale of your old home and the money/loan to make a down payment for the new property for the interim and thus the name interim loan.

A business may need short-term cash flow in instances where they have works or projects that ensure funds would be coming in but need some cash upfront to, say, pay for raw materials. Technically that is an intention rather than a loan type as many types of loans can serve that purpose. Though many relationship managers and salespeople may call it a bridging loan, confusing the purpose, for a loan type or trying to be different so that the borrower cannot easily find the same loan type on another bank's website - another problem you will not have if you use to Find The Loan you need!

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A board rate refers to an interest rate that the lender determines internally. How this rate is set, is something usually not revealed to the public.  Unlike international lending or interest rates such as Libor, for example, if you try searching the term online and it returns no results or solely from one lender, chances it might be just a board rate.

With little transparency, and no telling how it will rise or fall in the future, consumers have begun avoiding them. So, some lenders have begun calling them by other names instead of board rates. Also, lenders usually include in their loan agreement the right to change their board rate at any point in time, giving the borrower only as little as 30 days’ notice.

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To own a vehicle in Singapore, individuals are required to bid for and obtain a COE. The COE system is designed as an auction where interested buyers submit bids, and the highest bidders are awarded the COEs. Once a COE is obtained, it must be registered with a vehicle purchase within a specified period. The COE is valid for ten years, after which it can be renewed for a further period, subject to prevailing regulations.

A COE loan in Singapore refers to a loan taken to finance the purchase renewal of the Certificate of Entitlement. When a car owner renews his COE and takes a loan for it, it is different from a Hire Purchase loan which is done on the onset and the quantum typically covers both the initial COE and the cost of the vehicle or sometimes called machine price.

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A construction loan is a type of loan that is used to finance the construction of a new building or the renovation of an existing building (not to be confused with renovation loan which is usually for the interior of a house/apartment and is the case when using Construction loans are typically short-term loans that are used to cover the cost of the materials, labour, and other expenses associated with construction.

Some construction loans are disbursed in a series of instalments, depending on the progress of the construction, while others are disbursed in a lump sum.

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Crowdfunding is a method of raising funds for a project, venture, or cause by collecting small contributions from a large number of people, typically via an online platform and there are 4 types of crowdfunding :

Donation-Based Crowdfunding: In this model, contributors donate money to support a cause or project without expecting any financial returns. Donations are typically driven by the desire to support a social cause, charity, or community effort.

Reward-Based Crowdfunding: In reward-based crowdfunding, contributors receive non-financial incentives or rewards in exchange for their financial support. These rewards can vary depending on the project and can range from pre-ordering a product, receiving exclusive merchandise, or getting special access to events or experiences.

Equity Crowdfunding: Equity crowdfunding allows individuals to invest in early-stage companies or startups in exchange for equity ownership. Investors provide capital with the expectation of financial returns, typically through dividends or capital appreciation when the company succeeds.

Debt Crowdfunding: Also known as peer-to-peer lending or crowdlending, debt crowdfunding involves individuals lending money to borrowers, who can be individuals or businesses. Borrowers repay the loan with interest over a specific period, providing lenders with a return on their investment.

Although most businesses still prefer traditional loans due to the longer cycle and effort to clearly communicate the purpose, benefits, and impact of the project to motivate potential contributors - It has become increasingly popular in some regions in recent years.

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For loans such as overdraft or invoice financing where interest can be calculated using various methods, it is very important to know if the Financing Partner is offering it on a daily, weekly or monthly basis.

Take for example a 45-days invoice of $100,000 at 2% per month calculated accordingly in the following example :




45 days x 0.06% x $100,000 = $102,700

45 days are considered as 7 weeks


7 weeks x 0.5% x $100,000 = $103,500 an extra $800 or close to 30% more than a daily interest loan

45 days are considered as 2 months


2 months x 2% x $100,000 = $104,000 an extra $1,300 or 48% more than a daily interest loan


To compare between 2 different loans easily, you can also use our calculator. On your dashboard, when quoting you, your Financing Partners are to indicate which method they are using, if they are not calculating it on a per annum (p.a) basis, so it is easy for you to compare and Find The Loan best suitable for you                      


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With a Debt Consolidation Plan (DCP), you are taking take out a new loan to pay off your existing loans and debts. The reason for that is if the new loan has a lower interest rate than your current one, you will save money on interest each month and may be able to pay off your debts faster. Or if the new loan has a longer tenure (up to 10 years for version 1) you may be able to lower your monthly payment making it easier for you to service them each month.

There are 2 versions of DCP. One is a scheme offered by The Associations Of Banks Of Singapore and its participating institutes and is suitable for unsecured debt on all credit cards and unsecured credit facilities with financial institutions in Singapore that exceeds 12 times of one’s monthly income. The other could be offered by any lender and depending on the lender, could be on any outstanding loan amount with any lender.

If you are having issues repaying your debts, it could be helpful to consider debt consolidation. You may also read The Associations Of Banks Of Singapore’s page on DCP to learn more  -

Also, consider going for credit counselling with organizations such as Credit Counselling Singapore (CCS) which is an independent non-profit organisation at or AMP's Debt Advisory Centre at


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The total cost of taking a loan is more than just comparing the interest rates charged. 

Take, for example, 2 loans both with a quantum of $10,000 and 1 year in tenure, with the 1st loan at 11% p.a per year without any fees, while the 2nd has a lower interest of 10% p.a, but has a one-time processing fee of $1,000 and an annual fee of 1%. The total fees of $1,000 and $100, make it slightly more expensive than the 1st, with an Effective interest rate (EIR) of 21% as you will pay a total of $2,100 in interest and fees. 

No one likes to be compared and that is why some banks and lenders make it hard for you to compare by separating the fees and interest rates, or so that they can advertise a low-interest rate. Note that the EIR shown on your dashboard is entered by the Financing Partners and there are a few ways to calculate EIR - for example, for some, the frequency of instalments, and projected inflation rate are taken into consideration.

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Enterprise Financing Scheme (EFS) is a series of schemes, not a loan type. For example. The “SME Fixed Asset” is essentially a scheme for 3 types of loans: Hire Purchase, Construction Loan and Property/Land Loan. While the “Project loan” also has a construction loan, it is meant for construction enterprises. Please visit ESG’s website for the most updated information. 

So please continue by selecting the actual loan type that you are looking for or visit our glossary for more.

As Enterprise Singapore will share the loan default risk with the Participating Financial Institutions (PFI), in theory, the PFIs may offer a lower rate than their in-house rate. You can also enquire from our other Financing Partners that are not Participating Financial Institutions that offer the same loan type, as you never know until you really compared them. Furthermore, besides looking for just the cheapest interest rate, the tenure and payment methods are things you should take into consideration as well. To learn more, read our FAQ on how to compare loans.


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A foreign legal opinion letter is a written opinion of a law firm in the same jurisdiction as the foreign party involved in the cross-border commercial transactions and is a service common provided by many law firms.

As a cross border transaction might end up being considered by the courts of any of a number of countries, a legal opinion is sought to ensure that the foreign party has the necessary capacity and power to enter into the transaction or to certify the legal validity of the transaction.

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Property gear up or cash out is similar to refinancing except that rather than just refinance based on the outstanding amount, you take a loan based on the valuation of the property/land.

Take, for example, Daniel took up a $700,000 loan on his property worth 1 million with ABCD bank some years ago at 2% p.a with just $300,000 outstanding now. Interest rates have fallen and Daniel can by refinancing with another bank at the now 1%, enjoy a lower rate for his current outstanding, paying a lower instalment each month.

Gearing up/Cashing out your property, is taking into consideration the amount of equity you have built up over the years, (thus it’s also called Property Equity Loan, mortgage withdrawal, 2nd mortgage or reverse mortgage in some regions), but rather than take a loan on the $300,000, Daniel takes a loan of $700,000 again - pay off the outstanding, and still have a cash flow of $400,000 which he can use to purchase another property or fund his business. If his property valuation has increased over the years or if another bank offers a higher Loan To Valuation (LTV) now, he could potentially cash out even more.

Gearing up can also be done with the property fully paid off.

For industrial and commercial machinery and equipment etc that have a high resale value even after taking note of depreciation, and with high liquidity that lenders can easily dispose of in the secondary market in the event of default, gearing up might also be possible.

But if interest rates have risen - instead of gearing up and borrowing say $700,000 at a higher interest, he could take a 2nd bank loan of only $400,000 while he still services the $300,000 outstanding with the 1st bank at a lower rate concurrently. The secondary lender places a lien/caveat on the property to protect its interests and it is called a second charge because the lender is second in line after the primary mortgage lender. The term “caveat” is a Latin term that translates to “let him beware”. It acts as a warning for third parties that the lodging party, known as the “Caveator”, has an interest in the property/land. Note a caveat may at times prevent the owner of the land from transferring or selling the asset without the prior consent of the Caveator.

2nd charge loan is also used when cash flow is required only for a short period, such as a few months to a year, when the 1st loan is still locked-in, or when the borrower has very bad credit.

5 different names for the same loan type? With you do not have to worry about all the various terms used by different lenders. Reach all our lending partners with just one submission to compare and Find The Loan you need. In fact, it has become such a nightmare, that at times a relationship manager joining another bank or lender might become confused. If you are looking for a loan, not using our platform and are concerned that you and your own relationship manager might not be talking about the same thing, send our glossary page to them!

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Hire purchase is a type of financing option that allows borrowers to purchase a vehicle over time by making regular payments to the lender. With a hire purchase agreement, the borrower pays an initial down payment and then makes monthly instalments until the loan is fully paid off. Once the loan is paid off, the borrower becomes the owner of the vehicle.

Vehicle loans, also known as auto loans, are a type of financing option that allows borrowers to purchase a vehicle by borrowing money from a lender. Like a hire purchase agreement, a vehicle loan requires the borrower to make regular payments to the lender until the loan is fully paid off. However, unlike a hire purchase agreement, a vehicle loan does not transfer ownership of the vehicle to the borrower until the loan is fully paid off. It is just like your house can be technically the lender's, legally speaking, until you paid off your mortgage. 

In some jurisdictions, the cost of depreciation may be tax-deductible for businesses that use vehicles for business purposes, depending on the ownership. To learn more, consider talking to your accountant.

As some lenders or salespeople may offer both or use them interchangeably or may even use the term leasing, though there are some differences in tax implications - For simplicity, our website will therefore treat the 2 as the same and you can send your enquiry to either type of lenders in the same application, with the lender stating with theirs offers', such details under the misc column tab on your dashboard. 

Hire purchases can also be done on industry and office equipment. Often purchasers may simply take the in-house- instalment plan offered by the seller where they can actually hunt for their own loan, which could be better at times.


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You offered a client say 120 days credit terms, but as you need the cash flow now, you can take the invoice to a factor where they advance e.g. 80% (advance/finance percentage) for your cashflow needs right now.

Used by businesses to improve their cash flow until their customers pay up, invoice financing (Some financiers may also call it Forfaiting) is when a business sells or pledges its accounts receivable or invoices to a Factor (and thus also the name factoring and invoice discounting) at a discount. Traditionally, they are more often used by businesses in trading, exporting, or manufacturing but nowadays, they are also used by those providing services than goods, such as web design or HR as more fintech factoring companies appear.

At times, they may charge you an interest (Discount Rate/Fee) like most loans and that is what they typically earn, apart from fees. However, many Factors in order not to have to fulfil lending laws if any, especially since it may involve multiple countries as even if they just serve the “borrowers” of one country, the borrowers’ invoices may be from a customer of another – they simply buy the invoice from you at a discount of say 80% (advance/finance percentage) and earn the difference instead of charging an interest rate. As a lender may not purchase all the invoices you presented, especially if they are from different customers of yours – on your dashboard it is clearly indicated which are the ones they intend to purchase and you can sell the other to another lender. If you present multiple invoices and say half of it a lender wants to offer 80% and the other at 90%, it will be sending you 2 quotes to your 1 enquiry.

At times, they also allow subsequent invoices presented without having to reassess you again, up to a limit (Advance/Facility Limit), making it similar to an overdraft. But when there is a limit (Advance/Facility Limit) making it similar to an overdraft, the advance/finance percentage then usually becomes a sub-limit, meaning for example, if you have a “line” of $500,000 and you have an invoice of $90,000 which is within the $500,000, they will factor you only 80% of the $90,000 and you can continue to present new invoices later until the limit of $500,000 is hit.

While it is one of the hardest loans to understand because of how many terms there are, used by lenders from various regions, once understood and a business can take advantage of it - it can be extremely helpful for a business, as it can keep on drawing down on it. This is probably the reason why most brokers shun away from even introducing their customers to invoice financing, as it is probably easier to just find another customer that qualifies for working capital loans. is all about empowering businesses and you, and we will be working with community partners such as Financial Advisors, accountants and CFOs that can help provide more hands-on help on understanding your loan offers and incorporating financial strategies into your business. Please refer to our Community Partners section for more.

On your dashboard, lenders regardless of which region they are from, communicate their offers to you in a common terminology so that it is easy for you to understand and compare. We included terminology from various regions so that should you speak to a lender from another region, you can know if they meant the same thing. Or better yet, have them approach and join us as a Financing Partner if they aren’t already, so you can compare for the best offers all in one place.

For projects that have milestone payments, unless you are factoring and issuing an invoice for each milestone completed, they are financing you based on the incomplete project in advance and thus is also called project financing/contract financing. Unless you and/or your customer have significant financial strength and/or along with credit insurance. Lenders typically prefer to consider just invoice financing with is more temporary.

At times, fulfilling an invoice requires you to have substantial finance to fund raw materials or inventories. Purchase Order finance, also known as PO financing, supplier financing, and reverse factoring, provides dedicated funding for businesses to pay only specified suppliers. Think overdraft but with a limited range of usage. 

Technically a purchase order is sent by buyers to vendors to track purchasing process and inventory, while an invoice is an official payment request sent by vendors to buyers once their order is fulfilled, however, some businesses may use the term interchangeably. So, it is simpler to just understand if you need financing to pay your supplier (PO) or if you want to advance cash flow from outstanding payments of your customers (invoice). 

Trade finance or import/export finance is yet another term that you may often hear along with the above. Sometimes they are used interchangeably, but most would tell you it is not a loan type but a range of services where they are also responsible for collecting the shipping documents and ensuring the payment to the exporter among other things.

Note: Many small businesses write “cash upon delivery” or “upon completion” as some of their large clients pay as and when they want to. However, you should still state a payment due date in your invoice even if you do not exact a late fee on your client. This is because the factor bases the tenure of the “loan” on the invoice’s credit term e.g. 120 days (to client) + 30 days (grace), meaning you have 150 days in total to repay the factor. Without it they may not be willing to consider taking in your invoice as it may have to be considered as a loan among other things.

If it is a progressive payment based on the completion of certain deliverables, make sure they are stated clearly as well, even if they are estimated dates/days. If they were stated separately via a contract, always include them as supporting documents to prevent delays with your application.

SMEs seeking financing frequently face delays due to the unstandardized format of their invoice. Therefore, it can be helpful to invest some time to look for a suitable template online. You may also find it helpful to read our articles on Fees and Interest calculation.

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Disclosed (also known as notified) invoice financing and Undisclosed (non-notified) invoice financing refers to who your customer makes the payment to – the lender/factor, who will then deduct whichever is owed to them and refund you the balance if any -  or you and which you will then pay the lender. As you need to notify or disclose to your customer to do so typically via a signed memo by them, thus the name notified invoice financing.

Disclosed invoice financing may cost lower than undisclosed financing as receiving the monies directly lower the risk to the factoring house. The reverse is true if your invoices are small amounts from multiple customers as it makes it harder for lenders to assess the risks. 

SME owners might at times feel uncomfortable with disclosed financing, as they fear that their customers will think that they are in financial difficulty. If your business is with large MNCs or government projects, they usually understand their long credit terms will affect their vendors’ cash flow. Furthermore, their finance and purchaser are often not the same people anyway. Knowing that you have a financier supporting your business, may actually give them the confidence that you have the funds to get the necessary equipment or to fund your payroll and deliver on the project.

Some factor houses understand for some borrowers, the concern remains. So, they may instead set up a joint account that reflects your company name instead, which you will just have to inform your customer to pay into later without a signed memo.

With you do not have to worry if the various terms used by different lenders’ websites refer to the same thing. Simply reach all our Financing Partners with just one submission to compare and Find The Loan you need.

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Land area refers to the size of the land the property is on, whereas the built-up area is the size of the property where space can be used – such as bedrooms, bathrooms, kitchens etc. For non-landed properties such as condominiums and apartments, land area is usually not used. And for properties that have multiple storeys, it will be larger than the land area. This would help you identify which is which even if your developer may have used another term. If can typically be found on the front plan or brochure.

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Machine scoring in lending refers to the use of automated algorithms or computer-based models to assess the creditworthiness of loan applicants. It involves the use of advanced analytics and machine learning techniques to analyze various data points and generate a credit score or risk assessment for each applicant.

Traditional lending processes often involve manual underwriting, where loan officers or credit analysts review applicants' financial information, credit history, and other relevant factors to make lending decisions. Machine scoring aims to automate and streamline this process by leveraging technology to analyze large volumes of data quickly and make more objective and consistent lending decisions.

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A merchant cash advance works by advancing a portion of your future daily debit and/or credit card sales in a lump sum to you. Unlike most business loans where instead of a fixed term and monthly instalment, a percentage of your card sales are released to the Financing Partner until the lump sum has been paid back.

Some “lenders” (an advancement/factoring may not be considered as a loan in some jurisdiction) may have a fix term of say 12 months and takes a range of example 5-20% of your daily/weekly/monthly card sales while ensuring you have enough to still fund day to day operation, while some lenders take example 10% of your revenue which could be any amount until the full amount has been repaid. As the “loan” may not have a fixed tenure, the interest is typically not calculated based on the period such as x% per month but by what they call a Factor Rate – a fixed percentage of the total quantum.

The mutually agreed-upon percentage is called a “holdback” or “retrieval rate” and the “lender” will prepare a letter for you to sign and inform the card processor to process it.  


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An overdraft (OD) is a standby credit facility that gives you instant access to short-term cash flow. Unlike a term loan with a fixed tenure(therefore the name term), you can typically repay it whenever your cash flow situation improves and any amount you repay into the OD account can be withdrawn again as long as the total outstanding amount is within the OD limit. Therefore, it is also called a “revolving credit facility or standby credit”. 

An overdraft can be a valuable financing instrument to consider even when there is no immediate need, as interest is only charged when there is a drawdown. Having a standby credit on hand could be useful for those urgent times when you do not want to wait for your loan to be approved. However, interest for an overdraft tends to be higher than a term loan and is best used for short-term ad hoc needs. 

There are 2 types of ODs – Secured and unsecured. Unsecured ODs are issued using largely your credit profile & income to determine your repayment ability, while secured ODs allow you to pledge collateral such as insurance (that has cash value), property, certain investments, and deposits etc as security and can be as high as 120% of the value of the collaterals depending on the lender and quality of the collaterals. 

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A personal loan is a type of loan that is designed to help individuals meet their financial needs. Personal loans can be used for a wide variety of purposes, including financing a home renovation or repair project, paying for medical expenses, or covering the cost of a wedding or other large event or emergencies.

Personal loans are typically unsecured, which means that they do not require collateral, such as a home or car, to be taken out. Thus, personal loans are mainly based on the borrower's creditworthiness, income, and other financial factors.

It is important for borrowers to carefully consider the terms and conditions of their personal loans, including the interest rate, fees, and repayment terms, before taking out a loan. Interest rates and fees on personal loans can vary widely depending on the lender so it is thus very important to compare around before signing on the dotted line.

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There are 2 main costs to borrowers when they take up a loan whether its for personal or business - interest & the fees they incur. The most common is the Processing fee (also known as Admin fee or Origination Fee) in which the lender charges a one-time percentage of the quantum or a fixed value, on top of the interest charged.

Application Fee. This kind of fee can be annoying because you might pay the fee and not even get a loan. However, this is very rare in Singapore, though they may request for a commitment fee.

Commitment fee or some lenders call it cancellation fee, applies where they will incur significant (usually for property loans) costs such as from buying valuation reports and credit reports, accessing your eligibility, to come out with the Letter of Offer and you might decide not to take up the loan.

For Invoice financing, rather than interest and quantum, they usually call it a discount fee and discount limit and it is based on the invoices you wish to pledge/sell to them on a month-to-month basis. A Facility Limit of example $100,000 (think overdraft) means even if you have in the following month, 20 invoices of $10,000 each, the total they can disburse to you at any one point in time is $100,000 across some or all of them depending on the Sub Limit (or Advanced/Finance Percentage), which is usually around 70-90% per invoice and not withstanding any outstanding amount.

Some Factors may not grant and therefore indicate a Facility Limit. It will be a one-time transaction and another invoice even from the same customer the next month, will be subjected to approval again. Vice versa, a Facility Limit does not mean all invoices will be accepted, but simply suggest a faster approval as some of the factors have been predetermined.

For Invoice financing or Overdrafts, some lenders may also charge a one-time fee, or an annual/monthly fee usually called a factoring charge to set up an account to provide you with such facilities.

The Discount Fee (or Discount Rate) (similar to the interest on a loan) is usually based on the amount of money that a Factor advances - For example, 90% of a $1,111 invoice would mean about $1,000 advanced to you and they made $111.  if you have a discount fee of 1% per month on $1,000 and you have 60 days to pay, you will have a discount fee of $20 to pay later when your customer has settled the invoice. And again, depending on the lender, they may call it differently, but usually, they mean the same thing. Some Factors may lump their “interest” in/up front and buy the invoice from you at 89% instead of collecting it later.

Other terms you might come across depending also on the loan types and region of the lender is from includes the following. These might be particularly important if you may for example, have problem making a repayment or wish to complete a loan earlier.

Early repayment charges. The fee a lender charges borrowers to recover the loss the lender incurs when a loan is partially or fully repaid earlier than agreed. Some lenders may call it a Prepayment Penalty. But not all lenders see it that way especially for shorter tenured loans

Late Payment Fee. Late payment fees are found on every type of loan, personal or business loan. They are charged whenever you fail to make a payment on time.

Returned Check Fee or insufficient funds fees are charged when you try to make a payment/GIRO on your loan but don’t have the cash in your account to cover the payment.

Payment processing fees may be charged when you insist on paying via a cheque versa digital payment.

Confused? Not to worry, is all about transparency and simplifying the process of finding and comparing a loan. From your dashboard, you can easily see the various fees from our Financing Partners to calculate which is The most suitable Loan for you. Other fees such as termination fee, late payment fee could also be found under its misc details column.

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Program lending, also known as policy-based lending or formula-based lending or checklist lending, involves providing loans based on criteria or guidelines set by the lender to help their credit officers to make quick decisions and process large amounts of enquiries. 

Discretionary lending allows for a more flexible and tailored approach to lending, considering the unique needs and characteristics of each borrower.

It often requires more extensive evaluation, research and analysis by the lender to assess the borrower's creditworthiness, risk and other qualitative factors such as the borrower's business strategies and competition landscape. Because of the high manpower and therefore cost required to even evaluate such loans and craft a proposal/s, they are usually reserved for very high quantum loans taken by large companies. Discretionary lending also often involves lengthy proposals with more than just quantum or interest but many other terms and conditions for the borrower to consider.

Due to the "straightforward" method of Program lending assessments, a borrower will therefore often find one bank or lender offering a different rate to another lender and therefore the need to compare around by applying with as many lenders as possible.

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Property/Land Sales Proceed Advancement Loan is an advancement of your sales proceed or loan disbursement, which as it will only be completed/disbursed much later - but as you need cashflow immediately for example your business - can be considered when you have an exercised OTP from a buyer or say during an en-bloc sale, or a letter of offer for the refinancing/new loan of the property/land, from another financial institute. For the latter, please note some banks may specifically state in their agreement that is not allowed.

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A property decoupling loan is used by homeowners who are going through a divorce and want to separate their mortgage from their property. This usually means a new loan is required as the previous loan is being serviced by 2 or more people. Often, it is not as simple as just taking one name out, as when the loan was initially offered, the lender assessed the risk factors based on 2 or more people.

It is important for homeowners to carefully consider the terms and conditions of these loans, as well as the potential risks and benefits of separating their mortgage from their property, before taking one out. Some of the factors that homeowners should consider include the interest rate, fees, and repayment terms of the previous loan, as well as the potential impact on their credit score and current financial situation.

In some regions, a decoupling loan is for homeowners who want to sell their property but have not yet paid off their mortgage and are thus unable to do so(Please read our article on Lien for more details). So, they will take out a property decoupling loan, which is used to pay off their existing mortgage. In Singapore, we typically call it a bridging loan instead.

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A property loan, also known as a mortgage, is a type of loan used to finance the purchase of a property, such as a home or a commercial building or the land beneath it. Some lenders may call both as property loans whereas some will offer land loans as a separate product.

Property loans are typically secured loans, which means that they are backed by the property being purchased as collateral.

There are a few different types of property loans, such as fixed-rate mortgages, floating-rate mortgages, and interest-only mortgages depending on the region. Fixed-rate mortgages have a fixed interest rate and a fixed repayment term, while floating-rate (also called adjustable-rate in some regions) mortgages have an interest rate that can fluctuate over time. Interest-only mortgages allow borrowers to pay only the interest on their loan for a set period of time, after which they must begin paying off the principal as well.

The latter is technically a repayment method rather than a loan type (which you can refer to our glossary on it, for more). But lenders like to brand their loan types differently to try to stand out but end up creating a nightmare for consumers with so many different terms for the same loan type. So do refer to our glossary and not just rely on the label they use to make sure both are on the same page, and you are not distracted by marketing terms!

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Refinancing a mortgage or "refi" for short, means paying off an existing loan and replacing it with a new one. Borrowers often choose to refinance when the interest-rate environment changes substantially, causing potential savings on debt payments from a new agreement.

Other reasons why borrowers refinance:

To shorten/lengthen the term of their mortgage resulting in a higher/lower monthly installment respectively.

To convert from a floating rate to a fixed-rate mortgage, or vice versa

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A renovation loan is a type of loan that is used to finance the renovation or repair of a property. Renovation loans are typically short-term loans that are used to cover the cost of materials, labor, and other expenses associated with renovating a property.

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There are several repayment terms types out there(not to be confused with Early repayment) and it is important to understand how which one works as it impacts your ability to service a loan. Let us look through them with the use of this example:  Daniel borrows $100,000 and the tenure is a year while the interest is 20% p.a. for simplicity. His total P (principal) and I (interest) would be $100,000 + $20,000 = S120,000

P+I servicing

  • He pays $10,000 monthly for 12 months ($120,000/12 month)


Interest servicing

  • He pays $1,666.66 monthly for 12 months ($20,000/12 months)
  • Then, pay off the $100,000 principal in one lump sum


Front end refers to the lender taking an amount upfront, typically the interest amount of $20,000 disbursing only $80,000 to him, which he then services $ 6,666.66 monthly for 12 months ($80,000/12 months). In some regions, it is also called a Discount Loan.

A Balloon repayment or a two-step mortgage can further reduce the monthly repayment installment for when the borrower has limited repayment capacity in the earlier years but is able to repay or refinance the loan after several years.

Balloon repayment


  • For example, the same 1-year loan can have a monthly installment based on 2 years instead, meaning $888 a month
  • Balance paid on the end of the 1st year lump sum.

Deferred repayment


  • No monthly servicing at the start
  • After period deferred, start serving


If it is a Deferred repayment (also known as Back End or Moratorium), the lender requires Daniel to start servicing the loan only after a couple of months or years. For example, in renovation loans after the renovation has been completed.

The last few types tend to be less common, as the principal is at risk to the lender for a longer period, and as such the interest charged could be higher, to offset the risk the lender is taking.

On your dashboard, all the various repayment terms are clearly displayed so that you can easily compare the various offers from our Financing Partners to find out which is The most suitable Loan for you.

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Revenue-based financing (RBF) is a form of alternative financing that provides capital to businesses in exchange for a percentage of their future revenue. It is a financing model designed to support growth-oriented companies, particularly tech startups, by offering them flexible funding options without the need for traditional collateral or fixed repayment schedules but based on their revenue.

It is also considered a form of Alternative Financing and depending on how it is being structured, can be closer to being a non-equity dilutive investment than a loan. Regardless of where it is leaning, its assessment process definitely has some element of how an investor conducts its due diligence than how a lender makes its credit assessment. We have seen a number of loan brokers advertising on their websites, that they work with RBF providers and can get a loan on your behalf. Whether may be mere click baits or they do have some actual working relationship - getting a potential investor onboard typically requires a good understanding of the business, its landscape, macro environment and competition & should ideally be left to the founder or CFO of a business to share, to ensure they are getting a competitive rate.

They may also include warrants(rights to purchase equity) in the term sheet and therefore you should involve a lawyer when they do, and a loan broker without a legal or CFO background is unlikely to advise you properly in such instances. It is also generally not done as a form of program lending(refer to another article of ours for more).

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A stock loan is a financial arrangement wherein an investor or borrower, borrows funds by using their existing stocks as collateral. Rather than selling the stocks outright, the investor temporarily transfers ownership of the securities to a lending institution or individual, commonly referred to as the lender. In return, the borrower receives a loan, typically a percentage of the stock's value.

Depending on the lender, they can be at times, a director of a large unlisted or listed company's own stock in the company. This is how billionaires like Elon Musk probably pay less income tax than you and I. As they can borrow against their own stock to fund their purchases of a jet or mansion, they do not have to draw an income.

In Singapore, lenders generally lend against the borrower's personal assets of various stocks or a director's own stock in a listed company. Also, Stock loans are generally not done as a form of program lending(refer to another article of ours for more) and are best left to the directors & officers for to company to apply and enter into, than for example, via a broker.

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With an Unsecured Loan, the borrower undertakes to make the repayments, and the lender will make a judgement on whether or not to lend based on their creditworthiness. The risks to the lender that they will not be repaid are relatively high, which means that the interest charged will be higher than a secured loan or the amount lent lower.

A Secured Loan is when a borrower put up a security(collateral) using something of value, such as a house, that the lender can take and sell to recover their losses if the borrower does not keep up with the loan repayments. When you take out a loan to buy a factory or house, the property itself is securing the loan.

In the UK, a secured loan is also called a debenture, whereas in the US, a long term loan even when unsecured, is called a Debenture.

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In the context of loans, "tenure" refers to the duration or period of time over which a borrower is expected to repay the loan in full. It represents the repayment period or the time it takes to satisfy the loan's principal and interest obligations.

Shorter tenures are typically associated with loans that have higher monthly instalment amounts but result in lower overall interest costs. while, longer tenures usually involve smaller monthly instalments as the loan is spread out over a loan period but may result in higher overall interest payments over the duration of the loan. To learn more, we suggest heading over to our article "How to compare loans and understand your dashboard" under our Glossary page.

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Venture debt is a type of financing that combines elements of debt and equity to provide capital to high-growth, early-stage companies. These companies are more often than not, tech startups such as Venture debt is typically provided by specialized lenders who understand the unique characteristics and risks associated with investing in these companies. Venture debt providers combine their loans with warrants (or rights to purchase equity), to compensate for the higher risk of default, although that is not always the case.

In recent years, the Singapore government has made some effort to promote the incorporation of venture debt providers and the use of venture debt, to provide more channels of financing available to enterprises. At the point of writing, Enterprise Singapore has a page dedicated to venture debt. If you are considering venture debt, you may consider heading over to their website.

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