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Stronger support for main contractors, their sub-contractors and suppliers: Easing financing bottlenecks in construction projects
In large civil engineering projects, payment delays can ripple through the project chain, underscoring the need for banking partners like OCBC to support cash flow continuity
Through close dialogue with industry players, OCBC is strengthening its support for the civil engineering ecosystem with tailored financing solutions designed to address sector-specific challenges.
PHOTO: HWA SENG BUILDER
From new MRT lines to the upcoming Changi Airport Terminal 5, billions of dollars’ worth of civil engineering projects are reshaping Singapore’s skyline.
According to the Building and Construction Authority, up to $53 billion in construction contracts
Yet what remains largely unseen is the complex financing required to get each project off the ground and delivered on time, often involving dozens of contractors operating under tight timelines.
This is a reality that is well understood by institutions such as OCBC, which works closely with players across the civil engineering (CE) ecosystem, supporting projects ranging from the construction of expressways and MRT stations to underground tunnels and sewerage systems.
For every project they undertake, main contractors are required to furnish guarantees issued by financial institutions, assuring project owners that contractual obligations will be met. Any delay in putting these guarantees in place can disrupt cash flow and derail project timelines.
The pressure intensifies on major projects, where a single main contractor may work with 20 to 30 sub-contractors, many of whom face similar financing challenges.
“Sub-contractors require substantial funds upfront to mobilise resources, including workforce deployment, site preparation and securing necessary permits,” says Ms Jacqueline Ng, finance director of main contractor Hwa Seng Builder.
Ms Sue Tan, managing director and business head of Enterprise Banking Industries at OCBC (left) and Mr Thomas Ng, group managing director of Hwa Seng Builder.
PHOTO: OCBC
“Civil engineering projects also demand specialised machinery, heavy equipment and bulk materials such as steel and concrete. These costs arise well before any revenue is realised from progress payments.”
With so much at stake, CE contractors need partners who can support them as they take on larger, more demanding construction projects – something OCBC understood.
Shares Ms Sue Tan, managing director and business head of Enterprise Banking Industries at OCBC: “Financing not just the main contractors but also their sub-contractors and suppliers, allows us to support the entire CE ecosystem holistically, positioning ourselves as the key banking partner across the value chain.”
A playbook shaped by sector insights
In late 2024, OCBC carried out dialogue sessions and industry gatherings with business owners across the CE ecosystem – main contractors, sub-contractors and suppliers – to better understand their needs and challenges so that the bank could enhance its support for the sector.
With deeper insights gathered from the sessions, the bank developed a dedicated sector playbook – one that enables OCBC to deliver tailored financial solutions in a timely manner for CE projects of any size and complexity.
“As a local bank, we are committed to supporting CE players who play a crucial role in their contributions to Singapore’s infrastructure development,” says Ms Tan.
Hwa Seng’s Ms Ng points to OCBC’s quick turnaround time in issuing a Banker’s Guarantee for one of their projects as an example of how the bank’s close collaboration and deep understanding of the sector made a difference.
“We believe another bank that’s not familiar with our operations and the CE sector may not have been able to meet our timeline and requirements,” she says.
How financing support prevents costly delays
Civil engineering (CE) projects can be long and complex. With tight timelines, delays can ripple quickly across the entire value chain.
By working with OCBC in the following areas, contractors can gain access to financing that aligns closely with how projects unfold on the ground, allowing them to stay focused on execution rather than administrative processes.
Cash management
Through OCBC’s cash management tools, contractors can better manage incoming collections, supplier payments and day-to-day operating expenses, helping them maintain liquidity throughout the project cycle.Bankers’ guarantees
With OCBC issuing bankers’ guarantees at each stage of a project, contractors are able to meet tender, execution and defects liability requirements on time – reducing the risk of delays to work on site.Equipment financing
OCBC’s equipment financing enables contractors to acquire machinery and vehicles such as cranes, excavators and tipper trucks when projects ramp up, without putting undue strain on cash reserves.Working capital financing
By tapping OCBC’s working capital financing, contractors can ease cash flow gaps between outgoing payments and incoming project collections, allowing operations to continue smoothly even during peak construction phases.
Ms Ng also shares that sub-contractors often require upfront financing to get projects off the ground, including funding for site preparation, hiring manpower, and the procurement of raw materials such as steel and concrete – support typically provided by main contractors such as Hwa Seng.
“OCBC took a proactive approach to gain a deep understanding of our sub-contractors’ operational and financial challenges,” said Ms Ng.
“The bank conducted discussions and site visits to learn about their business models, cash flow cycles, and project-specific pain points. OCBC then developed bespoke financing solutions for our sub-contractors that addressed their pain points.”
Supporting the full chain
(From left) OCBC’s Sue Tan, Lam Chuan Construction’s managing director Brandon Chin and OCBC’s executive director and engineering team head Jason Chiang at Lam Chuan’s newly acquired premises, secured through swift financing support from OCBC.
PHOTO: OCBC
Lam Chuan Construction was another sub-contractor that benefited from OCBC’s proactive support for the CE ecosystem.
After securing additional projects, Lam Chuan needed larger premises to support growing administrative functions, material handling and equipment storage.
Mr Brandon Chin, managing director of Lam Chuan, says: “Such properties are not easily available, and we had tight timelines, operational specifications and future expansion to consider.
“We approached our relationship manager at OCBC with a clear explanation of our business needs and time-sensitive commitments. The team immediately understood the urgency and guided us efficiently from assessment to approval. The entire process was completed in less than a month, which allowed us to take over the premises earlier and realise financial benefits from the timely acquisition.”
Supporting sustainability transition in built environment
OCBC has been an early partner in encouraging its civil engineering (CE) customers to embed sustainability practices in their operations as a way to future-proof their businesses.
This includes providing access to green loans and sustainability-linked loans that support customers at different stages of their sustainability journey.
Beyond financing, the bank works with its network of sustainability partners to share emerging sustainability requirements and industry examples, while offering advisory support to help CE firms navigate these changes.
OCBC’s Sue Tan (left) with Mr Or Toh Wat, group managing director of OKP Holdings at one of the company’s project sites.
PHOTO: OCBC
One example is OKP Holdings, which, following discussions with OCBC, set sustainability performance targets to reduce its carbon emissions intensity, making it one of the first CE firms to do so. OCBC supported the group’s commitment with sustainability-linked loans.
Through such engagement, more of OCBC’s CE customers are recognising that sustainability is not just an environmental move, but a strategic one that strengthens long-term resilience and readiness for the future.
Lam Chuan’s experience is not an isolated one, with other sub-contractors pointing to the growing importance of inclusive banking support across the sector.
Mr Koh Kong Wen, general manager of sub-contractor Koh Kock Leong Enterprise says: “The bank’s willingness to engage smaller sub-contractors and suppliers, not just the larger firms, has been seen as a positive move that strengthens the resilience of the entire CE ecosystem.”
In an ecosystem where every stakeholder receives timely and relevant financing support, everyone wins.
“When we support sub-contractors, this benefits the main contractors too,” Ms Tan says.
