From 1 September 2026 to 31 March 2027, Enterprise Singapore takes on 70% of the default risk, instead of the usual 50%, on two Enterprise Financing Scheme (EFS) facilities: the SME Working Capital Loan and the Project Loan. In the same period the Project Loan, previously for secured overseas projects, can also finance secured domestic construction projects by firms registered with BCA. The change applies to all eligible enterprises, which must be registered and operating in Singapore, at least 30% locally owned and have group sales of up to S$500 million. Loans are applied for through participating banks and finance companies.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
What changed, and why does it matter to borrowers?
The Ministry of Finance announced a time-bound enhancement to the EFS on 29 July 2026, as part of its second support package in response to the continuing Middle East situation. Enterprise Singapore’s facility pages now state that from 1 September 2026 to 31 March 2027 the risk share “for all enterprises will be 70%” on the two facilities.
| Facility | Usual risk share | 1 Sep 2026 to 31 Mar 2027 | Other change in the period |
|---|---|---|---|
| EFS SME Working Capital Loan | 50% (70% for young enterprises) | 70% for all eligible enterprises | None |
| EFS Project Loan | 50% (70% for young enterprises or challenged markets) | 70% for all eligible enterprises | May also finance secured domestic construction projects |
It is important to be clear about what risk share means. It is an arrangement between Enterprise Singapore and the lender: if the borrower becomes insolvent, the lender first follows its normal recovery process, including realising any security, and can then claim part of the unrecovered amount from Enterprise Singapore. The borrower still owes 100% of the loan. Interest rates remain a matter for each lender’s assessment.
What the higher risk share can do is make a lender more willing to extend credit to a borrower it might otherwise turn down or limit. It does not guarantee approval.
Who is eligible?
The general EFS conditions are:
- A business entity registered and operating in Singapore. ACRA-registered sole proprietorships, partnerships, LLPs and companies may apply, subject to the lender’s assessment.
- At least 30% local equity held directly or indirectly by Singaporeans and/or PRs, by ultimate individual ownership.
- Group annual sales turnover not exceeding S$500 million.
For the SME Working Capital Loan, the borrower must also be an SME: group revenue of up to S$100 million or up to 200 employees.
A “young enterprise”, which already qualified for 70% before the enhancement, is one formed within the past five years, with at least one employee and more than 50% of its equity held by individuals.
How much can you borrow?
| Term | SME Working Capital Loan | Project Loan |
|---|---|---|
| Purpose | Day-to-day operating cash flow | Fulfilling secured overseas projects, and from 1 Sep 2026 to 31 Mar 2027 secured domestic construction projects |
| Maximum loan | S$500,000 per borrower; overall borrower group limit of S$5 million for this facility | Subject to the S$50 million group limit below |
| Maximum tenor | Up to 5 years | Up to 15 years |
| Group limit across all EFS facilities | S$50 million per borrower group | |
| Interest rate | Set by the lender based on its risk assessment | |
A borrower group includes the borrower, corporate shareholders holding more than 50% at every level above it, and subsidiaries more than 50% held by the applicant or its ultimate parent. If your group already has EFS facilities, ask your lender how much headroom remains.
How does the domestic Project Loan work for construction firms?
Until September 2026, the Project Loan only financed secured overseas projects. During the enhancement period it may also finance secured domestic construction projects. Enterprise Singapore’s page sets out these conditions:
- Registration: the company must be registered under BCA’s Contractors Registration System (CRS) or Builders Licensing System (BLS).
- Secured work only: the loan must be tied to secured sales orders or projects. It cannot be used solely for general working capital or operating expenses.
- Fixed assets: any fixed assets financed must discharge a contractual obligation under the project.
The loan can take several forms, according to the page:
- Working capital loans for the project.
- Factory, building or land purchase, renovation or construction.
- Equipment, machinery, vessels or other fixed assets, including machinery hire purchase.
- Guarantees.
Lenders listed on the Project Loan page are DBS, HSBC, IFS Capital, Maybank, OCBC, RHB and UOB. The Working Capital Loan page lists a wider group of 16 participating financial institutions.
For a contractor, the most common use is likely to be bridging the gap between paying subcontractors and suppliers and receiving progress payments. If cash flow problems come from a customer not paying, the loan is not the only tool; see our guide to adjudication under the Security of Payment Act.
How do you apply?
- Check the dates. The enhanced risk share is stated for 1 September 2026 to 31 March 2027. Enterprise Singapore has not published whether the relevant date is the date you apply, the date the lender approves or the date the loan is drawn, so ask your lender which date it uses and leave enough time before 31 March 2027.
- Check eligibility. Confirm local shareholding by ultimate individual ownership and the group’s turnover and headcount.
- Prepare your financial pack. Lenders typically ask for recent financial statements, management accounts, bank statements and cash flow forecasts. For a Project Loan, add the contract or purchase order showing the project is secured, and your BCA registration for a domestic project.
- Approach a participating lender. Applications are subject to the lender’s own credit approval. The facility pages also refer to Enterprise Singapore’s ESIMS portal for applications and publish an applicant guide, so ask your lender which route it uses.
- Approve the borrowing internally. Pass the board resolutions the lender requires, especially if directors are asked to give personal guarantees or the company grants security. See corporate resolutions for financing.
New companies weighing up their first facility may also find our article on applying for a business loan as a new company useful.
Documents checklist
- ACRA business profile and constitution.
- Shareholding chart up to the ultimate individual owners, to show at least 30% local equity.
- Latest financial statements and current management accounts.
- Cash flow forecast covering the loan tenor.
- For a Project Loan: the secured contract or purchase order and a project budget.
- For a domestic construction project: evidence of BCA CRS or BLS registration.
- Board resolution approving the borrowing and any security or guarantee.
Each lender sets its own list; treat this as a starting point, not the official requirement.
A worked example
Example: A Singapore main contractor (hypothetical, BCA-registered, 70% Singaporean-owned, S$40 million group turnover) wins a S$6 million fit-out contract for a local commercial building in October 2026. It must pay suppliers and subcontractors months before progress payments arrive.
- Before September 2026, the EFS Project Loan was not available for this local job.
- During the enhancement period, the company approaches a Project Loan lender for a loan tied to the secured contract, with Enterprise Singapore sharing 70% of the default risk.
- The company still repays the full loan with interest set by the lender. Its directors check whether personal guarantees are required and pass a board resolution.
- Separately, it applies to another participating lender for an SME Working Capital Loan of up to S$500,000 for general overheads, because the Project Loan cannot be used solely for general working capital.
Frequently asked questions
Does the 70% risk share mean the government pays 70% of my loan?
No. You repay 100% of the loan. The 70% is the share of the lender’s loss that Enterprise Singapore bears if a borrower becomes insolvent.
Does the enhancement apply to every EFS facility?
No. It applies only to the SME Working Capital Loan and the Project Loan.
Will the interest rate be lower?
Enterprise Singapore does not set the rate; each lender prices the loan based on its own risk assessment.
Can a foreign-owned Singapore company use EFS?
Only if at least 30% of the equity is ultimately held by Singaporeans and/or PRs.
What happens after 31 March 2027?
The facility pages state that the enhancement runs to 31 March 2027. Unless Enterprise Singapore announces otherwise, the usual risk shares described on its pages would apply after that.
Where can I read about the other EFS facilities?
See our overview of EFS loan facilities and risk-share and our directory of Singapore government grants for companies.
Information checked against official sources on 6 November 2026. Official references: EFS SME Working Capital Loan, EFS Project Loan and the Ministry of Finance announcement of 29 July 2026.
Free grant consultation: is EFS financing right for your company?
Raffles Corporate Services has in-house certified grant consultants who are experienced with Singapore grant applications and the full grant process, from checking eligibility and preparing the proposal and supporting documents to submitting claims and meeting the conditions after approval. We can arrange a free consultation to review your company and identify which grants, including EFS financing, may be applicable.
Email [email protected] or WhatsApp +65 8501 7133 to book a time. The participating financial institution decides every application, and no consultant can guarantee approval.
Kevin Yeo, Raffles Corporate Services