What is the Enterprise Financing Scheme?
The Enterprise Financing Scheme (EFS) is Singapore’s flagship government-backed loan facilitation program, administered by Enterprise Singapore. It is NOT a grant — EFS works by sharing up to 70% of the lending risk with Participating Financial Institutions (banks), making it significantly easier for SMEs, startups, and growing businesses to secure bank loans they would otherwise struggle to obtain. EFS covers working capital, trade financing, project loans, venture debt, and green loans.
Under EFS, the government shares up to 70% of the loan default risk with Participating Financial Institutions (PFIs), encouraging banks to lend to businesses with growth potential but limited track record or collateral.
Business Refresh Package (March 2026): Four EFS components were enhanced from 1 April 2026:
- EFS-Green: Extended five years to 31 March 2031
- EFS-M&A: Domestic M&A support made permanent (was temporary until 31 March 2026)
- EFS-Trade Loan: Per-borrower caps (S$10M/S$20M) removed; combined S$50M across all EFS facilities
- EFS-Fixed Assets: Per-borrower caps (S$30M) removed; combined S$50M across all EFS facilities
See the Business Refresh Package 2026 for all scheme changes.
Budget 2026 Update: Individual borrower caps for EFS Fixed Assets Loan (S$30M) and Trade Loan (S$10M) have been lifted from 1 April 2026. The overall EFS cap of S$50M per borrower group remains. See Budget 2026 EFS Higher Loan Caps Explained for a detailed before/after comparison, or Budget 2026 Internationalisation Grants Overview for the broader context.
Who is EFS for?
- Startups and early-stage companies needing working capital
- SMEs seeking to fund growth projects
- Businesses requiring trade financing
- Companies investing in green initiatives
- Firms needing venture debt for expansion
Eligibility
To be eligible for EFS, your company must meet the following criteria:
- Registered and incorporated in Singapore
- At least 30% local shareholding
- Company has a Group Annual Sales Turnover not exceeding S$500 million
- Financially viable with sound business model
- Legitimate business need for financing
- Apply through a Participating Financial Institution (PFI)
Not Eligible
The following are not covered:
- Non-viable or distressed businesses
- Companies with less than 30% local shareholding
- Purely speculative ventures
- Businesses in prohibited sectors (check with PFI)
SME Definition
For “SME Working Capital” and “SME Fixed Assets” loan types, an SME is defined as:
- Group revenue of up to S$100 million, OR
- Maximum employment size of 200 employees
EFS Loan Types
EFS provides government risk-sharing across multiple loan categories:
1. EFS Working Capital Loan (SME Working Capital)
Government risk-share: Up to 70%
The EFS working capital loan is the most popular financing option for Singapore SMEs needing operational cash flow. This loan helps businesses bridge cash gaps, manage seasonal fluctuations, and maintain healthy operations.
What EFS working capital covers:
- Operating expenses and overheads
- Inventory and stock purchases
- Payroll and salary payments
- Supplier payments and accounts payable
- Short to medium-term cash flow needs
Loan terms:
- Maximum tenure: Up to 5 years
- Loan quantum: No fixed cap (based on business needs and creditworthiness)
- Typical range: S$50,000 to S$500,000 for SMEs
Who should apply:
- SMEs with stable revenue but temporary cash gaps
- Businesses with seasonal cash flow variations
- Companies needing bridge financing between receivables
- Firms expanding operations that require additional working capital
Not sure if you need working capital or trade financing? See Working Capital vs Trade Loan: Which EFS Loan is Right for You? below.
2. Project Loan
Government risk-share: Up to 70%
For specific growth projects:
- Business expansion initiatives
- New market development
- Major equipment purchases
- Technology implementation
Loan quantum: Varies based on project scope and viability
3. EFS Trade Loan
Government risk-share: Up to 70%
The EFS trade loan supports Singapore businesses engaged in import/export and international trade activities. Unlike the general working capital loan, trade loans are specifically tied to trade transactions.
What EFS trade loan covers:
- Pre-shipment financing (production costs before export)
- Post-shipment financing (bridge until payment received)
- Letter of credit (LC) facilities
- Trust receipt financing
- Export and import working capital
Loan terms:
- Tenure: Revolving facility tied to trade cycle
- Loan quantum: Based on trade transaction value
Who should apply:
- Import/export businesses needing transaction-specific financing
- Traders requiring LC facilities
- Manufacturers with overseas buyers needing pre-shipment finance
- Businesses with confirmed export orders needing production financing
4. Venture Debt
Government risk-share: Up to 70%
For high-growth startups:
- Bridge financing between funding rounds
- Complement equity funding
- Extend runway for startups
- Support rapid growth phase
Loan quantum: Typically up to S$5 million for qualified startups
5. Green Loan
Government risk-share: Up to 80%
For green and sustainability initiatives:
- Energy efficiency investments
- Renewable energy adoption
- Carbon reduction projects
- Sustainable business transformation
Enhanced support: Up to 80% government risk-share for green initiatives
Working Capital vs Trade Loan Comparison
Many SMEs are unsure whether to apply for an EFS working capital loan or a trade loan. Here is how to decide:
| Factor | EFS Working Capital Loan | EFS Trade Loan |
|---|---|---|
| Purpose | General operational expenses | Trade-specific transactions |
| Best for | Cash flow gaps, payroll, overheads | Import/export, LC facilities |
| Tenure | Up to 5 years fixed term | Revolving, tied to trade cycle |
| Documentation | Financial statements, business plan | Trade contracts, purchase orders, invoices |
| Disbursement | Lump sum or drawdown | Per trade transaction |
Choose EFS Working Capital Loan If:
- You need funds for general business operations
- Your cash needs are not tied to specific trade transactions
- You want a term loan with fixed repayment schedule
- You need flexibility in how funds are used
Choose EFS Trade Loan If:
- You have confirmed import/export orders
- You need financing tied to specific trade transactions
- You want revolving credit that refreshes with each trade cycle
- You need LC facilities or trust receipt financing
For a detailed comparison with decision flowcharts, see our guide: EFS Loan Types Compared.
How EFS Works
1. Apply Through PFI
EFS is accessed through banks, not directly:
- Identify your financing need
- Approach a Participating Financial Institution (PFI)
- Submit loan application to the bank
- Bank evaluates your application
- If approved, EFS automatically applies
2. Government Risk-Share
If loan defaults occur:
- Government absorbs up to 70% of losses (80% for green loans)
- Bank bears remaining risk
- This encourages banks to lend to growing businesses
- Borrower still liable for full loan repayment
3. Interest and Repayment
EFS is a loan, not a grant:
- Must repay principal + interest
- Interest rates set by PFI (market-based)
- Repayment terms vary by loan type
- Collateral requirements may be reduced due to risk-sharing
Important Considerations
- EFS is a loan facilitation scheme, NOT a grant
- You must repay the full loan amount with interest
- Government shares bank’s risk, not your cost
- Approval depends on bank’s credit assessment
- Interest rates determined by PFI
- Personal guarantees may still be required
What EFS Covers vs Does NOT Cover
| What EFS Does | What EFS Does NOT Do |
|---|---|
| Government shares up to 70% of loan default risk with bank | Provide direct cash grants or subsidies |
| Makes it easier for SMEs to get bank approval | Guarantee loan approval — bank still assesses creditworthiness |
| Reduces collateral requirements in some cases | Eliminate the need for collateral entirely |
| Covers working capital, trade, project, venture debt, and green loans | Cover equity financing or investment capital |
| Available to all Singapore-registered companies (≤S$500M turnover) | Available to foreign companies without Singapore registration |
| Green loans get enhanced 80% risk-share | Subsidize loan interest rates — rates are set by the bank |
Common Pitfalls to Avoid
- Treating EFS as a grant: EFS helps you get loans easier, but you must repay with interest
- Applying directly to Enterprise Singapore: Apply through Participating Financial Institutions
- Weak business case: Banks still assess creditworthiness; have solid financials and business plan
- Overleveraging: Borrow only what you need and can afford to repay
- Ignoring repayment terms: Understand interest rates and repayment schedules before accepting
Frequently Asked Questions
Is EFS a grant?
No. EFS is a loan facilitation scheme. You must repay the full loan amount plus interest to the bank.
How does EFS help me?
EFS makes it easier to get bank loans by having the government share lending risk with banks. This may result in better loan terms, reduced collateral requirements, or approval for businesses that banks would otherwise reject.
How much can I borrow?
Loan amounts vary by loan type and business situation. Working capital loans typically up to S$300,000-500,000. Project and venture debt loans can be higher based on viability.
Which banks participate in EFS?
Major banks in Singapore participate, including DBS, OCBC, UOB, and others. Check Enterprise Singapore’s website for the full list of Participating Financial Institutions.
What interest rate will I pay?
Interest rates are determined by the lending bank based on market conditions and your credit profile. EFS does not subsidize interest costs.
Can startups apply for EFS?
Yes! EFS Venture Debt is specifically designed for startups and high-growth companies. Startups can also access Working Capital and Project Loans.
When should I NOT use EFS?
EFS may not be the right choice if:
- You qualify for a grant instead (grants like EDG or PSG don’t need to be repaid)
- Your business is not financially viable — EFS helps viable businesses access loans, it does not rescue distressed companies
- You need equity financing (consider Startup SG Founder or VC funding instead)
- You can already secure bank loans on favorable terms without government support
How is EFS different from EDG or PSG?
EFS = Government-backed loan (must repay with interest). The government shares risk with the bank. EDG = Cash grant (no repayment). Covers up to 50% of project costs. PSG = Cash grant (no repayment). Covers up to 50% of pre-approved IT solutions.
Use EFS when you need working capital or project financing. Use EDG/PSG when you need co-funding for specific transformation projects.
Can I combine EFS with government grants?
Yes. Many SMEs use EFS for working capital while separately applying for EDG or PSG for specific projects. The key is that EFS covers different needs (cash flow, trade financing) than grants (project co-funding).
Do I need to apply directly to Enterprise Singapore?
No. EFS is accessed through Participating Financial Institutions (PFIs) — major banks like DBS, OCBC, UOB, and others. You apply for a loan at the bank, and EFS automatically applies if you qualify. There is no separate government application.
What if my EFS loan application is rejected by the bank?
The bank’s credit assessment still applies. If one bank rejects you, try another PFI — different banks have different risk appetites. You can also improve your application by providing stronger financials or a clearer business plan.
Related Guides
EFS Working Capital Loan Guides
- EFS Loan Types Compared - Decision matrix: Working Capital vs Trade vs Project loans
- EFS Quick Start Checklist - Check your eligibility in 2 minutes
Financing Decision Guides
- EFS vs Grants: Loans vs Subsidies - When to choose EFS working capital loan vs grants like EDG
- Venture Debt Explained - Alternative financing for high-growth startups
Application Guides
- Grant Pitfalls Guide - Common mistakes to avoid when applying for financing
Related Schemes
Looking for similar funding options? These schemes complement this grant or offer alternative pathways:
- EFS Venture Debt - Venture debt financing option
- Enterprise Development Grant (EDG) - Grant funding alternative
- Singapore Grants Glossary — key terms and definitions
References
Official Resources
- Enterprise Financing Scheme - Enterprise Singapore - Official scheme information
- List of Participating Financial Institutions - Banks offering EFS
- SME Financing - Other financing options
- Startup SG - Resources for startups