Six companies in Singapore have set up a $5 million fund to extend short-term loans to firms hit by the fallout from the coronavirus outbreak.

Local small and medium-sized enterprises (SMEs) whose businesses have been affected by the outbreak can apply for working capital loans for up to 12 months, the Singapore Business Federation (SBF) said yesterday.

The aim is to approve loans quickly and disburse funds within 24 hours of approval.

The initiative called Helping Our Promising Enterprises (Hope) was set up by Goldbell Group, Super Group founder's investment firm Apricot Capital, Ho Lee Group, Paradise Group, Sing Lun Group and Soilbuild Group. The companies are part of the SBF's young business leaders network. Their fund is one of a range of private-sector measures to help tide beleaguered companies over challenges stemming from the virus outbreak.

Initiatives have ranged from offers to restructure debt to extension of the moratorium on principal repayment for loans.

Ms Chong Ee Rong, who chairs the young business leaders network, said the fund is "one way that our members can contribute and help our fellow SMEs in need" and possibly rally other companies to participate. "There is no doubt that Singapore will overcome this trying time, but how we help each other through will shape our future," she added.

The fund, which opens for applications next Wednesday, aims to help more than 100 companies.

Firms can expect to receive loans within 24 hours of approval.

Goldbell Financial Services chief executive Alex Chua said: "We understand the urgency of the situation and have constructed a credit-scoring model for this programme, allowing loans to be approved quickly and to be disbursed within 24 hours from loan approval, subject to the required documentation received."

The matching of borrowers to funds will go through Goldbell Group's private debt investment platform, Goldbell Evolution Network. The platform has a capital markets services licence from the Monetary Authority of Singapore that allows Goldbell to manage funds, among other regulated activities.

The fund will offer a fixed loan of $50,000 for each firm with lending rates starting at 0.5 per cent a month up to 0.75 per cent a month.

Industry rates for working capital loans can vary widely, typically ranging between 7 and 18 per cent a year, according to a Business Times report.

The Hope fund also allows a deferment of the loan principal and interest repayment to start from the third month on. Processing fees of $80, which are reportedly the lowest in the market, will be levied to cover administrative charges, the report added.

Companies must have been locally incorporated for more than 12 months, have at least 30 per cent Singaporean shareholding and a minimum paid-up capital of $25,000.