As a small business owner, what happens if I'm unable to pay back my loan? ?

The banks would make you do a very detailed financial review before lending you money =) Collaterals for company assets are secured loans.

For unsecured loans, the banks would not ask for collaterals from personal assets. In those case, it is probably customised loans by the requests of the directors, and the amount must not be small (to justify the legal documents and workings of the loans)

Secured Loans like mortgage loans, invoice financing (to buy goods)

1. low interest rates
2. maximum abt 80% of the value of the collateral (the property, for example)
3. directors act as guarantors

Unsecured business loans

1. higher interest rate
2. Up to an amount that the bank provides based on your monthly revenue and profits. They will go through all the bank account statements of your past 6 months.
3. Directors act as personal guarantors too

If you are unable to pay secured loans, they will proceed to seize the collateral.

If its unsecured loan, they will start legal proceedings on the company first, and then if the assets are not enough, it will move on the directors.

It is actually in the interests of the borrowers for bankruptcy, NOT in the interests of the banks. Banks don't like you to be bankrupt, as they lose their money.

Borrowers won't go for bankruptcy if the amount is small (not worth the loss of freedom).

For loans, most banks still require personal guarantor, so even if you set up a Pte Ltd, you will still be liable for it.

If you can't pay back the loan, it will grow into a big loan lo... bankruptcy can only be filed under some circumstances.
https://blog.moneysmart.sg/budgeting/bankruptcy...