We thank Mr Erwin Phua Siew Jen for his feedback on the SME Working Capital Loan (Terms for local loans may be pushing SMEs overseas; June 20).

The Working Capital Loan programme was introduced at Budget 2016 to address small and medium-sized enterprises' (SMEs) near-term cash flow concerns and growth financing needs during this period of slow economic growth.

Under the programme, SMEs can apply for unsecured term loans of up to $300,000 each.

As of last month, about 6,400 SMEs have tapped the SME Working Capital Loan programme, amounting to a total of $1.13 billion.

SMEs use working capital loans mainly for cash-flow management and the purchase of material or stock.

Besides facilitating SMEs' access to financing, Spring Singapore also supports their financial management upgrading efforts through the Capability Development Grant.

One in four SMEs faces delays in customers' payments, which can heavily impact a company's cash flow.

Establishing strong financial management processes can help SMEs to optimise their cash flow to either reduce overall financing costs or reinvest for growth.

SMEs would need to assess their business needs when identifying suitable financing options to support their business.

SMEs that are keen to improve their financial management capabilities can seek free business diagnosis and basic advice at any of the 12 SME Centres supported by Spring.

Sean See

Director,

Financing & Incentives Management

Spring Singapore