SME Spotlight

Banks line up new options for SMEs

The schemes include (clockwise from above) OCBC's Business Growth Account, Maybank's BizMortgage Plus and Hong Leong Finance's SME Care.
The schemes include OCBC's Business Growth Account (above), Maybank's BizMortgage Plus and Hong Leong Finance's SME Care.PHOTOS: ST FILE, HONG LEONG FINANCE
The schemes include (clockwise from above) OCBC's Business Growth Account, Maybank's BizMortgage Plus and Hong Leong Finance's SME Care.
The schemes include OCBC's Business Growth Account, Maybank's BizMortgage Plus (above) and Hong Leong Finance's SME Care.PHOTOS: ST FILE, HONG LEONG FINANCE
The schemes include (clockwise from above) OCBC's Business Growth Account, Maybank's BizMortgage Plus and Hong Leong Finance's SME Care.
The schemes include OCBC's Business Growth Account, Maybank's BizMortgage Plus and (above) Hong Leong Finance's SME Care.PHOTOS: ST FILE, HONG LEONG FINANCE

Fresh avenues for cash-strapped firms seeking help amid economic slowdown

Banks have rolled out a range of new financing options for cash- strapped small and medium-sized enterprises (SMEs).

Many SMEs grappling with the economic slowdown are struggling with issues such as tighter credit from suppliers or delayed payments from customers, with few avenues open for additional funding.

One option is Maybank's BizMortgage Plus, which offers financing of up to 120 per cent of the value of completed, owner-occupied commercial and industrial property in Singapore.

Eligible companies will be offered a bundle deal comprising a loan and working capital financing options - a term loan, an overdraft, trade facilities or business credit card.

Maybank expects BizMortgage Plus to contribute about a third of its total business property financing next year.

There is also a scheme launched by Hong Leong Finance.

EASIER ENTRY LEVEL

We are aware that start-ups have fewer and simpler transactional needs. For most start-ups, cash flow is always an issue and to set aside $1,000 for an initial deposit may be tough for some of them.

MR ERIC ONG, head of emerging business at OCBC.

Its SME Capability Ready Programme (SME Care) aims to support companies looking to apply for government grants.

The programme involves Hong Leong relationship managers giving advice about these grants, which reimburse companies for capability-boosting investments.

Hong Leong Finance will also offer bridging loans to help SMEs wait out the reimbursement period, or work out financing options for those that do not qualify for the grants.

"The... programme is carefully designed to complement the government capabilities grant schemes to help transform SMEs to embrace the future," said Mr Ang Tang Chor, president of Hong Leong Finance.

"They now have more avenues of financial support to upgrade their capabilities to become more competitive and future-ready."

And OCBC Bank has launched a current account for start-ups.

The OCBC Business Growth Account has the lowest initial deposit in the market at $500, and requires a minimum average monthly account balance of $3,000.

"We are aware that start-ups have fewer and simpler transactional needs. For most start-ups, cash flow is always an issue and to set aside $1,000 for an initial deposit may be tough for some of them," said Mr Eric Ong, head of emerging business at OCBC.

The account's low minimum monthly balance will also allow firms to use funds for day-to-day operations instead of locking cash up in the bank, he added.

A version of this article appeared in the print edition of The Straits Times on November 23, 2016, with the headline 'Banks line up new options for SMEs'. Print Edition | Subscribe