Linkflow Capital: SME Loan Interest Rates Spike to 8.16% in 2023, Average Loan Quantum Drops 42%
- Written by Media Outreach
The study, based on data from 2,466 unique users of Linkflow Capital's SME loan comparison portal, reveals that average business loan interest rates spiked to 8.16% in 2023, the highest in a decade and more than triple from the lowest rate of 2.50% recorded in 2020 during the pandemic.
"We are witnessing a marked shift in the SME financing environment, with the sharp rise in borrowing costs and decrease in loan quantum reflecting the challenging financing landscape SMEs faced in 2023," said Benjamin Teo, spokesperson for Linkflow Capital. "This trend is driven by the unwinding of pandemic-era support measures and the broader high interest rate environment."
Key findings from the 2023 survey include:
- Increased Borrowing Costs: The average SME business loan interest rate reached a high of 8.16% per annum in 2023.
- Reduced Loan Quantum: The average loan quantum approved decreased to $130,236 in 2023, continuing a downward trend from $184,345 in 2022.
- Revenue profile of users improved slightly: Increased proportion of users in higher revenue brackets. 50% of users reported annual revenue below $300K (down from 57% in 2022).
- Digital banks gaining traction: Digital banks' share of loan origination within Linkflow's platform rose to 17%, a more than 3-fold increase from 5% in 2022.
For detailed figures and data on Linkflow Capital's research survey, visit https://smeloan.sg/blog/2023-sme-finance-accessibility-survey.
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