Borrowing for your business

You run a company and you need money for it — stock, equipment, a fit-out, a hire, a gap between an invoice sent and an invoice paid. You came here asking how to raise against what you own. The honest answer is that the question is almost never about your business at all. It is a property conversation wearing a business suit. The asset a bank actually trusts is the flat or the shophouse you already hold title to, not the company's own balance sheet — and the mechanics, the tax, and the risk all follow from that one fact.

The mechanics — two very different levers, and most owners pull only one

There are two separate routes into the same pot of money, and they are underwritten by completely different logic. The first is personal: you, as an individual, take a cash-out loan against a property you already own — an equity term loan or, if the property is mortgage-free or lightly geared, a Mortgage Equity Withdrawal Loan (MWL) — and the bank hands you a lump sum priced close to an ordinary home loan. Nothing on the loan document says the money is for a business; the bank does not ask, and MAS's own MWL rules state nothing about the purpose of the proceeds. The second route is corporate: your company borrows, either from a bank commercial facility secured on business premises or receivables, or through a government-backed scheme such as Enterprise Singapore's Enterprise Financing Scheme, which alone covers eight distinct loan types from working capital to fixed assets to trade finance. A third, faster but far costlier lane sits beside both — non-bank private credit, which lends against a caveat on the property in days rather than weeks, ignoring TDSR and a prior bank rejection, at a materially higher rate.

The two main routes are priced worlds apart because they are underwriting different things. The personal equity loan is priced off your home — 1.4% to 2.5% a year, close to a mortgage, because the bank's risk is a residential property it already understands. A standalone bank business or renovation loan, unsecured or lightly secured, runs far higher: one bank's standard facility is quoted at 4.88% a year flat (5.96% effective), against roughly 1.4% for mortgage-priced money over the same term and principal — call it four times the cost for the same cash. If the asset you are willing to pledge is your home, the equity loan is very often the cheapest money your business will ever be offered, and that is precisely why so many SME owners end up here without meaning to.

Eligibility — whose name is actually on the loan

This is the fork that decides almost everything downstream. MAS's Total Debt Servicing Ratio regime applies to an individual borrowing to buy or to borrow against a property — including a sole proprietor, and including someone who incorporates a company solely to hold one property — capped at 55% of gross income, tested at a 4% floor rate, with variable, commission and rental income counted at only 70% of face value. It does not apply to a loan taken in a company's own name; MAS's own explainer states plainly that company loans sit under a different credit-assessment regime entirely. A company borrowing against commercial or industrial property is instead assessed on Debt Service Coverage Ratio — commonly a 1.2 to 1.4x minimum, crediting up to 70% of gross rental income where the unit is tenanted — a test built around the business's own cash flow, not a payslip.

Escaping TDSR by borrowing in the company's name does not escape you personally. Almost every SME facility in Singapore, secured or nominally unsecured, is backstopped by a personal guarantee from the company's own directors or shareholders — sign it, and you are on the hook for any shortfall even where no specific asset was pledged at the outset. Some banks additionally want a third-party guarantor showing income above roughly S$40,000 a year. Limited liability is the reason most owners incorporate; the personal guarantee is the industry's standard answer to it, and it quietly puts your home back in the picture even when the loan itself sits on the company's books.

• If you go the government-backed route, Enterprise Singapore's Enterprise Financing Scheme sets its own eligibility floor, independent of any property test:
• Registered with ACRA — sole proprietorship, partnership, LLP or company
• Group annual sales turnover not above S$100 million, or not more than 200 employees, to count as an SME
• At least 30% shareholding held by Singapore Citizens and/or Permanent Residents
• Enterprise Singapore shares 50% of the default risk with the lender as standard, 70% for an enterprise under five years old (temporarily 70% for all enterprises from 1 September 2026 to 31 March 2027)
• The borrower still repays 100% of the loan; the risk-share sits between the lender and the government, not between you and the debt

Citizenship status — SC, PR, foreigner, FTA nationals

Citizenship matters far less to this page than it does to a purchase, and it matters in two different places for two different reasons. On the personal route, an equity term loan or MWL is a refinancing against a property you already own — not a purchase — so it does not itself trigger Buyer's Stamp Duty or Additional Buyer's Stamp Duty, only a mortgage duty of 0.4% of the loan amount, capped at S$500. Nationality does not change that; it only ever mattered when you bought the underlying property, not when you re-mortgage it. On the corporate route, if the business instead buys its own premises outright — an office, a shop, a B1 or B2 industrial unit — commercial and industrial property carries 0% ABSD for any buyer of any citizenship, any number of properties already owned. The FTA parity that treats US, Swiss, Liechtenstein, Norwegian and Icelandic nationals as Singapore Citizens for residential ABSD is simply irrelevant here, because there is no ABSD to equalise against in the first place. Where citizenship does bite is the EFS's 30% local-equity test on the company's own shareholders, and, if a foreign national or foreign-owned entity is a shareholder, standard company law and licensing checks that sit outside this page.

Taxes — what actually gets triggered, and what does not

Drawing equity out of a home you already own is a re-mortgage, not a sale and not a purchase, so the property-transaction taxes that dominate every other page on this site — Additional Buyer's Stamp Duty, Seller's Stamp Duty — simply do not apply. The only duty on the paperwork itself is mortgage duty, 0.4% of the loan quantum, capped at S$500. Your property tax bill does not change because you took a loan against the home; it changes only if you stop occupying it, since owner-occupier rates apply to just the one property you live in.

If the business instead buys its own commercial or industrial premises, a different and separate tax stack applies. Buyer's Stamp Duty on non-residential property runs a flat 5% above S$1.5 million — IRAS's own schedule, though the bands below that threshold are reported inconsistently across commercial guides and worth checking on IRAS's own calculator before you commit to a number. ABSD is 0%, as above. Industrial property carries its own three-year Seller's Stamp Duty schedule — 15% in year one, 10% in year two, 5% in year three, nil after — separate from, and shorter than, the four-year residential schedule; office and retail space carries none at all. Property tax on non-residential property is a flat 10% of Annual Value, with no owner-occupier concession, whatever you use the space for. And CPF is not part of this conversation in any form: CPF Ordinary Account savings fund only HDB flats and private residential property under CPF Board's own housing scheme — a commercial or industrial purchase, and any business financing drawn against your home's equity, runs entirely in cash and bank debt. [⚠ industrial.ssd.rates_2026: sources differ; awaiting a ruling]

Borrowing — LTV, TDSR, MSR, HDB versus bank, fixed versus floating

An HDB flat cannot be cashed out at all — equity term loans and MWLs are a private-property product only, and an HDB loan cannot be refinanced into one; only a bank loan can be re-mortgaged this way. For a private property, MAS caps a Mortgage Equity Withdrawal Loan at 75% loan-to-value where there is no other outstanding housing loan on your name, falling to 45% where there is one already, tenure capped at 35 years, and you can only draw against equity built with your own cash — CPF principal used on the property, and its accrued interest, is walled off and cannot be taken as cash. The Mortgage Servicing Ratio, the 30% cap that governs HDB and EC financing, does not apply to an MWL at all, because MWLs cannot be taken on HDB flats or on an EC still inside its minimum occupation period. TDSR itself has a built-in exemption worth knowing: where the MWL plus every other loan secured on the property comes to 50% or less of current market value, TDSR does not apply, full stop — useful if you have paid down a large share of the mortgage already.

Where TDSR does apply, an SME owner's own income is frequently the harder part of the assessment, not the property. Business income, dividends, commission and rental income are all counted as variable income under MAS's rules and haircut to 70% of face value before they count toward the 55% ceiling — a salaried employee's payslip clears the same bar more easily than a director's own drawings often do. A retiree or an owner sitting on liquid savings rather than salary can convert those into countable income instead: cash pledged to the bank for at least four years counts in full, no haircut, while the same cash left unpledged is haircut by 70% and amortised over 48 months — on S$1,000,000, the difference between roughly S$11,460 and S$3,440 a month of usable debt-service capacity, for the same money, purely as a function of whether it is locked up.

On the rate itself, instalments on a cash-out loan are serviced in cash only — CPF cannot touch it — disbursed as one lump sum rather than a revolving line, at pricing close to an ordinary mortgage rather than a business loan. HDB financing, by contrast, is fixed with no lock-in and no early-repayment penalty; a bank loan typically carries a one-to-three-year lock-in with an early-exit penalty of about 1.5% of the outstanding balance — relevant only if you already hold, or might refinance into, an HDB loan on a residential property elsewhere, since the flat itself cannot be the source of the cash-out.

Reno, A&A and fit-out — the cheapest money for your shop is very often your home

If part of what you need the money for is a fit-out — an office, a shop, a workshop — the same rate gap that applies to a home renovation applies here too, and it is larger than most owners expect. A standalone bank renovation or business loan runs 4.18% to 4.88% flat (5.96% effective on the higher figure), plus a roughly 2% handling fee and 1% insurance premium taken off the top before any work starts — about 3% of the principal gone before disbursement. Mortgage-priced money on the same principal and term costs a fraction of that: on S$30,000 over five years, the comparison runs about S$1,080 in interest for mortgage-priced money against S$3,869 in interest plus S$900 in fees for a standard bank renovation loan — roughly 4.4 times the cost for identical cash. Industrial and factory fit-out itself runs roughly S$90 to over S$200 per square foot depending on power loading and the extent of mechanical and electrical work, which gives a rough sense of what is actually being financed. None of this changes CPF's position: CPF savings cannot fund renovation, fitting-out, or any part of a commercial or industrial purchase, on your home or on the business premises, under any circumstance. [⚠ borrow.reno.fee_and_penalty_structure_2026_09_16: sources differ; awaiting a ruling]

Conveyancing — the legal work is lighter than a purchase, but it is not free

A cash-out or equity loan against a home you already own is legally simpler than a purchase — there is no Option to Purchase, no exercise, no conveyancing chain to a seller — but it is not paperwork-free. Expect legal fees of roughly S$2,000 to S$3,500 for the mortgage-side work, plus a valuation fee of S$300 to S$600, since the bank appoints its own panel valuer and you do not get to choose one; the loan is sized off the lower of that valuation and the property's assumed value, not what you believe it is worth. Add an early-repayment penalty of roughly 1% to 1.5% of the outstanding balance if you close the facility early. If the business instead buys its own commercial premises, the same private-conveyancing rules apply as any private purchase — no government fee schedule, S$2,000 to S$5,000 all-in is typical — plus the Singapore Land Authority's own registration and search fees, and mortgage duty of 0.4% of the loan, capped at S$500, on the charge itself.

Estate — what happens to the guarantee, and the property, if the owner is no longer here

This is the spoke owners of a business most often skip, and it is the one where the two routes diverge hardest. Incorporate, and shareholders carry limited liability for the company's own debts — but a personal guarantee signed against an SME facility is a separate personal obligation that survives the shield entirely; it does not evaporate because the company is a company. A caveat lodged by a lender against the pledged property locks it: it cannot be sold or transferred without the debt being repaid in full, and a family settling an estate can find the sale proceeds substantially consumed by it before anyone else is paid. Set against that, a sole proprietorship or a partnership carries unlimited personal liability from day one — every business debt is already a personal debt, guarantee or not, which is precisely the risk a company structure exists to contain, and precisely why the guarantee that reintroduces it deserves to be read line by line before it is signed, not after.

The twelve questions

Every borrowing decision on this site gets asked the same way, in plain language, because the two questions that actually sort a reader are not "are you buying to invest or to live in it" — nobody buys believing the asset will fall, so that question sorts nobody. The two that matter here: are you borrowing to buy, and once you hold the asset, are you letting it out. For this page the asset being borrowed against is usually your home, and what you are buying with the proceeds is not another property but a business input — stock, a hire, a fit-out, working capital. That is a third cell the simple 2x2 does not name on its own, and it is worth stating outright before the twelve questions: borrowing against an owner-occupied home to fund a business is negative carry on the property by construction, exactly like ordinary owner-occupied borrowing, except the return you are underwriting is no longer the home's own appreciation — it is whatever the business does with the cash.

C0 — the play

This is a balance-sheet play wearing a cash-flow decision. You are not buying an asset expecting it to rise; you are converting equity that already exists into cash your business can use today, at the cost of a monthly payment your household, not your company, now carries.

C1 — balance sheet

What you own does not change — you still hold the same property. What you owe does change: a new charge sits against it, up to 75% loan-to-value on an MWL with no other housing loan outstanding, falling to 45% with one already in place. Your personal net worth on paper falls by the amount drawn, even though the cash sits in your business account rather than having left your control.

C2 — cash flow

Money moves out every month as loan repayment, in cash, since CPF cannot service it — and money moves in only if the business generates enough to cover both its own costs and that repayment. The funding gap is real: if the business's own cash flow does not carry the instalment, your household income has to, which is the entire reason a lender was willing to price this so far below a business loan.

C3 — profit and loss

P&L is not the same question as cash flow, and conflating them is where people get hurt. The business can show a profit on paper for the quarter while its cash account is empty because the loan proceeds went to stock that has not yet sold — or it can be cash-rich from the drawdown while genuinely lossmaking underneath. The loan itself does not touch the company's P&L at all if it sits on your personal balance sheet rather than the company's.

C4 — carry

There is no rental income offsetting this loan the way there is on an investment property — you are financing a business, not a tenant. Carry here is not rent minus interest; it is business return minus interest, and unlike a let-out property there is no market yield to benchmark it against. If the business does not clear the interest cost, the carry is negative by definition, funded out of your own income.

C5 — give and get

What you give: a charge over your home, monthly cash out of your household, at mortgage-close pricing (1.4% to 2.5% a year). What you get: capital far cheaper than any unsecured business facility, disbursed in days to weeks rather than months, with no dilution of the company and no investor to answer to.

C6 — exposed to

Two separate risks stacked on top of each other: the property market, which determines what the home is worth if it ever has to be sold, and the business itself, which determines whether the loan gets serviced at all. A downturn that hits both at once — property values soften while the business slows — is the scenario this structure is most exposed to, because the two risks are meant to be uncorrelated and, in a genuine recession, rarely are.

C7 — for how long

An MWL runs up to 35 years in tenure, but the business need behind it is very rarely a 35-year need — most SME cash needs are working-capital cycles measured in months or a handful of years. Borrowing long against a short need means paying for optionality you may not use; borrowing to match the actual business cycle, then repaying early, brings its own penalty of roughly 1% to 1.5% of the balance outstanding.

C8 — failure cascade

If the business does not perform, the order runs the same way it runs everywhere else on this site: negative carry first — the business cannot cover the instalment out of its own cash. That hits your household cash flow. Sustained, it accumulates into a P&L problem, as reserves earmarked for the business get diverted to debt service instead. From there it becomes negative equity if the property's value has also softened while the loan balance has not. Negative equity plus a business that still needs cash becomes illiquidity — nothing left that can be turned into money without selling something at a loss. Left unresolved, that is insolvency, personal or corporate depending on whose name is on the loan and whether a guarantee is attached.

C9 — liquidity

The property itself is not quickly liquid — a private sale in Singapore runs weeks to months even in a good market, and a forced sale under pressure typically realises less than an orderly one. The loan proceeds, once drawn, are fully liquid cash sitting in your business account; the illiquid asset is what remains behind it as security, not the money you actually spent.

C10 — control

This is where reno, A&A and fit-out belong on this page: control is the one lever squarely in your own hands. You cannot move the property market and you cannot move how your business performs, but you can control what the borrowed capital is spent on and how efficiently. A fit-out financed at mortgage rates rather than a standalone business loan is control expressed as arithmetic — the same S$30,000, spent the same way, costs roughly 4.4 times less in interest and fees purely because of which facility carried it.

C11 — the exit

Getting out means either repaying the facility from business proceeds — the clean exit — or selling the underlying property, which repays the loan out of sale proceeds along with everything else the mortgage carries. Getting out early costs a prepayment penalty of roughly 1% to 1.5% of the balance; getting out by force, through a lender's caveat after a default, can consume a large share of what the property would otherwise have realised, which is the scenario the estate section above describes from the other end.

The B2B spoke — who you actually employ in this transaction

An SME owner drawing on a home to fund a business is, functionally, running two transactions in parallel: a mortgage broker or relationship manager who structures the cash-out or MWL, and — if the company route is used instead or alongside — a corporate finance broker who packages the Enterprise Financing Scheme application or a commercial facility, sometimes the same person wearing two hats. Neither party is paid by you directly in the ordinary case; a mortgage broker is paid a placement fee by the bank, and an EFS-participating lender bears its own cost of the government risk-share, not a fee passed to you. Ask, plainly, whether the broker is being paid to place the loan with a specific lender's panel and whether that panel is exhaustive or a shortlist — a broker who says "no fee to you, I'm paid by the bank" is telling the truth about the mechanism, not necessarily about whether the recommended lender is the cheapest one available to you.

Where a property agent enters this picture is usually only if the business itself is buying or leasing its own premises — an office, a shop, a B1 or B2 unit — rather than simply cashing out an existing home. CEA sets no fixed commission for that transaction, commercial or residential; the rate is negotiable and must be agreed and documented in a Prescribed Estate Agency Agreement before the agent starts work, and payment goes to the licensed agency, never to the individual salesperson directly. An agent cannot act for, and collect commission from, both the landlord or seller and your business in the same deal — that is an offence, not a grey area.

The realtor economics — what an agent earns here, and where it points

Say it plainly, including against himself: if the business route runs through a property purchase — buying rather than leasing premises — a realtor's commission is paid on the transaction closing, not on whether the premises turn out to be the right size, the right location, or the right financing structure for your business three years from now. An agent pushing you toward a purchase over a lease, or toward a larger unit than the business needs, earns more from the larger deal regardless of whether it serves you. CEA's own guidance tells you to negotiate the rate before signing and to put it in writing in the Prescribed Estate Agency Agreement — nearly eight in ten consumers already know commission is negotiable, and of those who negotiated, 85% succeeded in lowering it. The lender-side broker on the cash-out loan has a parallel and separate incentive: paid by the bank on placement, their interest is in the loan closing, not necessarily in it being structured on the cheapest terms available to you across the full panel.