Singapore SMEs face highest borrowing costs in 2024

Approvals for loans above $300,000 accounted for only 3% in 2024.

Singapore's small and medium-sized enterprises (SMEs) battled the highest borrowing costs in 2024, rising to 8.47% per annum, according to Linkflow Capital's survey.

SMEs also encountered tighter credit access as approvals for loans above $300,000 accounted for only 3% of approved loans in 2024, down from 10% in 2023.

Notably, approvals for loans exceeding $500,000 ceased entirely.

The survey also found that whilst local banks maintained the largest share (59%) of loan origination, foreign banks have significantly increased their share to 26%. Digital banks decreased loan share to more than half (8%) of loan origination.

Looking ahead, Linkflow Capital said there are early signs of rate relief. The 3-month Singapore Overnight Rate Average benchmark has fallen from 3.03% in January to 2.55% by April 2025.

However, business lending rates are expected to adjust slowly and partially, with any reductions materialising only from Q3 2025 onwards.

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