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Invoice Financing allows businesses to obtain financing when they have received a Purchase Order from a client. This allows businesses to obtain working capital without having to apply for a bank loan. The process is also faster and the credit assessment slightly more flexible as project has already been awarded.

“We must continue to support the growth
of our enterprises, and as they mature,
drive deeper transformation.”
– Heng Swee Keat, Budget 2020 Speech

1. What is the Invoice Financing?

Invoice Financing is a financing product offered directly by Banks and Invoice Financing companies in Singapore.

Invoice Financing can be used for business expansion, to unlock cashflow, payment for goods, purchase of goods from suppliers, financing daily operations or the growth of companies as well as other business expenses

2. What is the criteria to apply?

The criteria for applying for the Invoice Financing is as follows

Company TypeSole Proprietors, LLPs and Private Limited companies are eligible to apply
ShareholdingNo Limitation
Incorporation LengthSubject To Bank’s Assessment
Has an Invoice for Goods or Services been issued?Yes

All businesses incorporated in Singapore who have delivered and invoiced their clients for products or services already delivered. The requirement for invoice financing is that work must have already been performed and acknowledged by the client, and the borrower is awaiting on their payment terms.

3. How and Who do I apply to?

To apply the following documentation is required, but not limited to

Documentation TypeRequired?
6 months company bank statementsYes
2 Years Profit Loss and Balance SheetsYes
2 Years Director’s Notice of Assessment (Income Tax)Yes
Director’s NRICYes
Signed Application FormYes
Invoices sent to the customerYes

The invoice financing amount is based on the outstanding invoice value. Financiers can give up to 80% of the invoice value as financing.

Lastly, a write-up or justification for the purpose of the loan in required. Should you be applying through Equity, we will do this for you.

Are you lacking or unsure of the documentation required? Click here for a specialist to do the work for you.

4. The participating lenders in
the Invoice Financing Program are as follows

DBS Bank Ltd
Oversea-Chinese Banking Corporation Ltd (OCBC Bank)
Maybank Singapore Ltd
Standard Chartered Bank
United Overseas Bank Ltd

These lenders above are all participating in the Invoice Financing by the Singapore Government. However, each lender has their own further qualifying criteria. For instance, a business might qualify with Lender A, but be rejected by Lender B and vice versa. The qualifying criteria for each lender changes constantly so do check back from time to time if you are not eligible the first time.

5. How much Can I Loan?

Businesses can loan up to 80% of the invoice value value or Up to S$1,000,000 whichever is lower.

Should businesses require additional funds aside from invoice financing , they can apply for the SME Working Capital Loan, which allows businesses to borrow also up to S$1,000,000, This is also useful for businesses seeking additional cashflow or for business expansion.

There is no collateral required for invoice financing, and in certain situations a confirmation that the invoice has been received may be required.

The financing amount is calculated on based on a LTV (Loan-to-Value) on the invoice which can go up to 80%

The following table illustrates how much funds you can obtain by invoice financing

Invoice ValueLoan To Value (“LTV)You ReceiveBalance Refunded
$50,00080%$40,000$10,000 less fees
$100,00075%$75,000$25,000 less fees
$200,00060%$120,000$60,000 less fees
Lenders hold the balance LTV with them and refund it to you when your client makes payment less their fees and interest.

Different Lenders offer different LTV and Interest rates. To find out more about Invoice Financing and to obtain a high LTV and financing amount let Equity help you.

6. How Long can I loan for?

The maximum tenure of the invoice financing facility depends on the credit terms offered to clients. Typically the average credit term is 45 days to 60 days and in certain cases up to 90 days. Invoice Financing therefore is a very useful financing product to unlock cashflow.

An illustration of the repayments is in the table below

Loan PeriodTotal AmountInterest Rate (%)/MonthRepayment Amount
30 days$100,0001101,100
60 days$100,0001102,200
90 days$100,0001104,400
No Early Repayment Penalty

*monthly repayments might vary and are subject to change

At the end of the payment terms, the business is supposed to ensure that their customers pay on time to the specified account. Unlike a working capital loan, Invoice Financing is a short term financing product which requires clients to make payment by the end of their payment terms. Late payment may result in additional costs.

7. What are the interest rates like?

Interest Rates depend on the lender but are in the range of 0.5% to 1% per month. The interest rate is vastly different by the different lenders in the market. Equity Capital Solutions can assist you to identify the lender with the lowest rate and provide a smooth and seamless application. Please click here to have a specialist assist you.

8. What happens if I decide to pay early?

For Invoice Financing, your client typically pays directly to the lender. If there are early repayments, the interest is calculated to the day that the repayment is made and pro-rated accordingly. Hence it is always advisable to secure payment from your clients sooner than later.

In certain scenarios, the invoices are paid off directly to the lender and in this scenario the lender will refund you the balance less fees.

9. What if I need more than the amount approved?

The amount for the of financing depends on the value of the invoice up to 80%. Businesses are only able to apply to one lender for each invoice. This means that if you finance an invoice with lender A, you are unable to finance it again with lender B.

If you require more than S$1,000,000 you can apply for the SME Working Capital Loan, (“WCL”), Temporary Bridging Loan (“TBL” ) which goes up to S$5,000,000 or the Business Term Loan offered by banks

10. What happens if I don’t qualify?

Don’t qualify for Invoice Financing? Don’t worry! Businesses still have access to Working Capital and Temporary Bridging Loan as well as SME Micro Loan for Business loans in Singapore

Equity Capital Solutions can assist to identify why the your application was not eligible for the WCL and assist you again for a successful application.

For greater credit amounts up to S$5,000,000, you might want to explore applying for the Temporary Bridging Loan.


In summary, Invoice Financing can be a very useful product for businesses seeking to increase their cash flow or for business expansion. It can be done on an adhoc basis, giving businesses the flexibility to decide when to use such a facility. This is an important financing product for businesses looking to grow with cheaper capital costs and should be considered for every business.

How It Works

  • Make a Free Enquiry.
  • An Equity financing specialist will reach out to you for some simple details.
  • We work together with you for the documentation.
  • You relax and we do the heavy lifting for you.
  • We contact you when its approved for signing down the loan.