Business Financing · Singapore
Many Singapore business owners are sitting on equity they don't know they can access. If you own a private property, your home or commercial unit could be your most powerful source of business capital — at rates far cheaper than any SME loan.
Yes — if you own a private property in Singapore, you can borrow against its equity and use that cash to fund your business. This is called a property equity cashout, and it is one of the most cost-effective forms of business financing available to Singapore SME owners.
The reason is simple: because the loan is secured against your property, banks offer it at mortgage rates — typically 3%–4% p.a. — compared to 7%–9% p.a. for unsecured SME working capital loans or business term loans. For large capital requirements, this rate difference saves tens of thousands of dollars over the loan tenure.
A $500,000 property equity cashout at 3.5% p.a. over 5 years costs roughly $45,000 in total interest. The same amount via an unsecured business term loan at 8% p.a. costs roughly $108,000. That's a $63,000 difference — purely from using your property as security.
Most Singapore business owners instinctively reach for an SME loan, working capital facility, or business term loan when they need capital. These are valid options — but they come with limitations: lower loan quantum, higher interest rates, and strict income and revenue requirements.
Property equity cashout sidesteps many of these constraints. The bank is lending against a hard asset — your property — not just your business's cash flow. This means:
Not all property types are eligible. Here's the breakdown for Singapore:
| Property Type | Eligible? | Notes |
|---|---|---|
| Private condo / apartment | ✅ Yes | Most common — all major banks offer this |
| Landed (terrace, semi-D, bungalow) | ✅ Yes | Higher quantum available given valuations |
| Commercial property (shophouse, office, retail) | ✅ Yes | Different LTV and tenure rules apply |
| Industrial property | ✅ Yes (some banks) | More selective — depends on zoning and tenure |
| Executive Condominium (EC) | ✅ After MOP | Eligible once 5-year Minimum Occupation Period completed |
| HDB flat | ❌ No | HDB rules prohibit this — see our HDB vs Private guide |
For private residential properties, the MAS Loan-to-Value (LTV) limit caps the total borrowing at 75% of the property's market value. Your maximum cashout is:
Maximum cashout = (Property value × 75%) − Outstanding mortgage balance
For commercial and industrial properties, LTV limits are generally lower — typically 55%–70% depending on the bank and property type. Tenure is also shorter, usually up to 25 years for commercial vs 30 years for residential.
The property is valued by an independent MAS-approved valuer at the time of application. Banks lend against the lower of purchase price or appraised value.
Banks in Singapore do not restrict how you use equity cashout proceeds. Common business applications include:
Fund the purchase of a business, franchise, or competitor without tapping business reserves or bringing in investors.
Build inventory ahead of peak season or a large contract without straining working capital.
Fit out a new outlet, office, or facility at a fraction of the financing cost of a business loan.
Fund entry into Malaysia, Indonesia, or other regional markets without complex cross-border financing.
Replace high-interest business loans or credit lines with cheaper property-secured debt.
Build a cash reserve to weather downturns, delayed receivables, or unexpected expenses.
The right answer depends on your situation. Here's an honest side-by-side:
For large capital requirements — business acquisitions, major expansions, or debt consolidation — property equity cashout almost always wins on cost. For short-term working capital where speed and simplicity matter more than rate, an SME loan may be faster to arrange.
Many savvy Singapore business owners use both: property equity cashout for strategic capital, and a working capital line for day-to-day cash flow management.
The Total Debt Servicing Ratio (TDSR) normally limits total debt repayments to 55% of gross monthly income. For business owners with variable or complex income, this can be a sticking point.
However, MAS provides a key exemption: if the total LTV across all loans on the property stays at or below 50%, TDSR does not apply to the equity cashout loan. This is specifically designed to help asset-rich, income-complex borrowers — which describes many Singapore business owners perfectly.
If you are self-employed or your business income is irregular, structuring your cashout to keep LTV at or below 50% eliminates the income stress test entirely. A broker can help you calculate exactly how much you can access within this band before you apply.
David wants to open a 4th outlet in Jurong East. He needs $600,000 for fitout, equipment, and 6 months operating reserve. His condo is fully paid up.
David takes $600,000 at 42.8% LTV — within the 50% band, so TDSR does not apply. His variable F&B income doesn't affect approval. Rate: 3.6% p.a. over 10 years.
Using your personal property to fund a business is not without risk. Be clear-eyed about the downside before proceeding:
These risks are manageable with proper structuring — keeping LTV conservative, maintaining adequate business reserves, and not over-leveraging. A broker can help you think through the structure before you commit.
VeFi specialises in exactly this intersection — business owners who own property and want to deploy that equity intelligently. We work across all major Singapore banks including DBS, OCBC, UOB, Standard Chartered, Maybank, CIMB, and Hong Leong Finance to find the most competitive rate and structure for your situation.
We serve business owners across Singapore — from shophouse owners in Tanjong Pagar and Chinatown to condo owners in Orchard, Buona Vista, Bishan, Tampines, and Sengkang looking to fund their next business move.
Our team handles the entire process from assessment to approval.
For more on how property equity cashout works in Singapore, see our Complete 2026 Guide to Property Equity Cashout and our breakdown of HDB vs Private Property — What's the Difference.
Tell us what you need — we'll run the numbers and show you your options across banks. Free, no obligation.