Efforts will be made to ensure that businesses have continued access to credit despite the uncertainty brought about by the coronavirus outbreak, said Deputy Prime Minister and Finance Minister Heng Swee Keat yesterday.
The Government will increase its risk share of loans taken under several loan financing schemes announced or enhanced in Budget 2020 in February and Resilience Budget last month to 90 per cent, up from 80 per cent.
This applies to loans initiated under the Temporary Bridging Loan Programme, the SME Working Capital Loan programme, and the Enterprise Financing Scheme - Trade Loan scheme from tomorrow to March 31, 2021.
The measure announced in Parliament yesterday aims to lend businesses additional support to cope with the "circuit breaker" measures amid the Covid-19 outbreak and to resume activities after the measures are lifted.
"The economy needs support and intervention in many different forms to go through this rough patch," said Mr Heng. "I urge all businesses, landlords, financial institutions and industry players to do your part in channelling the Government's support measures to firms, workers and households."
The "circuit breaker" measures will see most companies, apart from those in essential services, operating at a reduced level from today for close to a month.
Mr Heng noted that the Monetary Authority of Singapore (MAS), alongside financial institutions, has introduced a package of measures to help small and medium-sized enterprises (SMEs) with temporary cash-flow difficulties. For example, SMEs can now opt to defer principal payments on their secured term loans until the end of 2020.
More than $40 billion of SMEs' existing loans are likely to qualify for this relief, said Mr Heng.
He added that banks and finance companies may also apply for low-cost funding through a new MAS Singapore Dollar facility, for new loans granted under the SME Working Capital Loan and Temporary Bridging Loan programmes.
They must commit to pass on the savings to borrowers if they use this facility for funding, Mr Heng said.
Responding to the $5.1 billion Solidarity Budget unveiled yesterday, Singapore Business Federation chief executive Ho Meng Kit said: "The Solidarity Budget is immediate, direct and substantial help which our businesses need so as to survive the circuit breaker period and save jobs."
The business chamber has launched a helpline to help companies navigate coronavirus-related government advisories for businesses and is also working on a programme to help companies build business resilience for the present challenges and the long term, he added.
The Singapore International Chamber of Commerce (SICC) called the Solidarity Budget "an appropriate, rational and fast response", noting the swift announcements of the three packages to help Singaporeans cope with Covid-19 in successive months.
But there remains a need for more banks to step up and support more SMEs, by providing loans without demanding that SME owners mortgage their homes, the SICC said, especially with the enhanced security of the Government taking on a higher risk share.