Two schemes disburse over $490m in loans

The loans are meant to help firms ride out the Covid-19 crisis. ST PHOTO: ALPHONSUS CHERN

More than 1,200 companies have taken government-assisted loans under two programmes meant to help businesses ride out the Covid-19 crisis.

These loans total more than $490 million, said a spokesman for Enterprise Singapore (ESG). They were made available under the Enhanced Enterprise Financing Scheme - SME Working Capital Loan and the Temporary Bridging Loan Programme, two initiatives launched on March 2.

"We have seen encouraging response," said the spokesman.

The Temporary Bridging Loan Programme is aimed at helping local companies manage their immediate cash flow needs. Companies that require more working capital can apply for the Enhanced Enterprise Financing Scheme - SME Working Capital Loan.

Deputy Prime Minister and Finance Minister Heng Swee Keat said in Parliament on April 6 that the Government will increase its risk share of loans taken under several loan financing schemes - announced or enhanced in Budget 2020 in February and last month's Resilience Budget - to 90 per cent, up from 80 per cent.

Mr Heng said in February that the Enterprise Financing Scheme - SME Working Capital Loan component will be enhanced for one year.

The maximum loan quantum will be doubled to $600,000, while the Government's risk share on the loans will be raised to 80 per cent. Its current risk share is 50 per cent to 70 per cent.

Mr Heng also introduced the Temporary Bridging Loan Programme for a year to help businesses in the tourism sector with their cash flow.

From April 1, funding was made available across all sectors. Businesses can take a loan of up to $5 million under the programme, up from the previous $1 million cap.

The SME Working Capital Loan was also updated last month. The maximum loan quantum was increased to $1 million from the cap of $600,000 announced in February.

Last year, more than 7,100 companies took out working capital loans before the programme was spruced up this year, ESG noted.

Jew Kit Group director Florence Toh received the enhanced working capital loan through OCBC Bank to automate her business.

She runs a chain of five eateries and wants to update her point-of-sale system.

She said: "This will facilitate the keying in of orders, and enable payments to be made prior to the collection of food... The loan is useful to tide us through this difficult period where we still have to pay wages and rent, but we also want to prepare for the future."

Aw Cheng Wei and Choo Yun Ting

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A version of this article appeared in the print edition of The Straits Times on April 23, 2020, with the headline Two schemes disburse over $490m in loans. Subscribe