Small and medium-sized enterprises (SMEs) form the backbone of Singapore’s economy, accounting for more than 99% of all enterprises and employing about two-thirds of the workforce. 

Yet despite their importance, many SMEs still face challenges accessing timely, flexible financing to support growth. This is where non-bank lending, supported by developments in open banking, can make a real difference.

In this article, we’ll explain what non-bank lending is, how it works in Singapore, and why it’s becoming an increasingly valuable tool for SMEs navigating a competitive business landscape.

What is non-bank lending?

Non-bank lending is financing provided by institutions outside of the traditional banking system. Instead of going through a major bank, SMEs can access loans, lines of credit and other tailored funding options from licensed lenders, fintech platforms or specialist finance companies.

Unlike traditional banks, which often have stricter requirements, non-bank lenders can use technology, data and open banking frameworks to assess creditworthiness in a more dynamic and inclusive way. This means more businesses – even those without lengthy credit histories or extensive collateral – can access funding to run and grow their operations. 

How does non-bank lending work in Singapore?

The Monetary Authority of Singapore (MAS) encourages the adoption of open banking and digital transformation, creating a fertile environment for fintech lenders to operate alongside traditional banks.

Here’s how the process typically works:

  1. Application: SMEs apply online through a non-bank lender’s platform, often sharing key financial and business information.
  2. Data sharing via open banking: With the customer’s consent, lenders can securely access bank statements, cash flow data, or accounting software records to better understand financial health.
  3. Credit assessment: Advanced analytics and alternative data sources are used to make faster and fairer lending decisions.
  4. Funding approval: Decisions can be made within hours or days, rather than weeks, with funds transferred directly to the SME’s account.
  5. Repayments: Flexible repayment structures are often available, including daily, weekly, or monthly instalments designed to match cash flow cycles.

This model aligns with Singapore’s push toward a Smart Financial Centre, a MAS-led initiative to embed technology, innovation, and competition into the financial sector, improving access, efficiency, and resilience.

Benefits of non-bank lending for Singapore SMEs

1. Faster access to capital

SMEs often need fast funding – whether to seize a growth opportunity, handle seasonal demand, or bridge a cash flow gap. Non-bank lenders are designed for speed, with approval times often within the same day.

2. Greater flexibility

Unlike banks, which tend to take a one-size-fits-all approach, non-bank lenders provide flexible solutions. SMEs can access short-term loans, revolving lines of credit, or larger funding packages tailored to their circumstances.

3. Broader access for underserved businesses

Start-ups, younger businesses, or SMEs in industries considered higher risk can find it difficult to secure loans from banks. By using open banking data and alternative credit scoring, non-bank lenders can extend credit to businesses that would otherwise be excluded.

4. Supporting innovation and growth

With reliable access to funding, SMEs can invest in technology, expand operations, hire staff or enter new markets. For a fast-moving economy like Singapore’s, this agility is essential.

5. Complementary to traditional banking

Non-bank lending does not replace banks. Instead, it complements them by filling gaps in the market. Many SMEs in Singapore use both, depending on their needs.

Why open banking is key

Open banking is the secure sharing of financial data between banks and third-party providers (with the customer’s permission). In Singapore, MAS is driving initiatives like the API Exchange (APIX) to foster innovation in this space.

For SMEs, this means more transparency in funding options, more personalised solutions, and more control over their lending facilities. 

Ultimately, open banking builds trust and efficiency into the financial system, allowing SMEs to benefit from fairer, faster, and more competitive lending options.

The future of SME financing in Singapore

As Singapore continues to strengthen its position as a global financial hub, the role of non-bank lenders will only expand. The government’s support for digital transformation, combined with SMEs’ growing appetite for agile solutions, means alternative lending will become a mainstream part of the financing ecosystem.

For SMEs, now is the time to start exploring open banking and non-bank lending options with Bizcap Singapore. We work hand-in-hand with a wide range of partners, including brokers, advisers and accountants, to identify funding solutions tailored to each business’ unique needs. 

Our team has deep experience assessing complex deals with simplicity, coordinating with credit specialists, external parties, brokers and SMEs themselves to deliver outcomes that traditional lenders often can’t.

By tapping into Bizcap’s expertise, SMEs can gain faster access to capital, greater flexibility, and the confidence to pursue their next stage of growth.