SME stands for small-medium enterprises, and SME loan is the business loan extended only to medium-sized enterprises. While the underlying meaning of SME’s definition is the same across the World, only specific rules differ between them. The SME Loan dispenses a single line of credit for meeting up completely with the borrowing needs of small-medium enterprises. It can be used as a working capital as well as for long-term demands or requirements. 

After considering the nature of business, cyclical trends, cash flow projections, and peak time requirements, it is accepted. In many countries , they define the number of employees as the defining point. In Singapore, a company that makes lesser than $100 million per year and has lower than 200 Workers is termed as SME. It is taken into cognizance while setting the terms and conditions of financing this sector. It has been identified that nearly 180,000 such companies under the definition of SME’s are analyzing their financial background. Here are the types of SME loans or say, small business loans mentioned as below:


  • Peer-To-Peer Lending.
  • Revenue-Based Finance Loan System.
  • Government Business Loans.
  • Pension-Led Funding.
  • Invoice Financing.
  • eBay Loans.
  • Commercial Mortgages.
  • Loans For Young Entrepreneurs.
  • Secured And Unsecured Business Loans
  • Specialist business loans


When deterioration of business happens in the market, the first people to suffer are the SME’s. The very core of such companies in finance. All try to wade through the waters of uncertain business along with others who may be structurally more durable and can withstand a temporary period of lull. On analyzing specific past figures, we get to know that the largest of losses happen in particular sectors. 

To start with, it has been shipping, oil & gas, construction, etcetera. The alarming thing about this that the Debt Servicing ability has been feeble. The interest is covered less than two times and has fallen to 29%. One should remember that SME’s used to contribute 46% of the country’s GDP way back in 2008. The aim of the companies those provide credits to the small-medium enterprises is to help SME’s with the finance who wish to see daylight. They intend to finance their working capital requirements, in other words. Such companies hope to bridge SMEs current asset-liability deficiency. 

Elyse Sanford