About $1.7 billion drawn from past reserves will be used to finance several enhanced schemes to provide businesses with access to credit amid the coronavirus pandemic.
The temporary bridging loan programme, which Budget 2020 had set aside for the hard-hit tourism sector, will be available for enterprises across all sectors from April 1.
Businesses can take a loan of up to $5 million under the programme, an increase from the previous $1 million cap. All eligible enterprises can apply for the programme till March 31 next year.
With the enhancements, even the hardest-hit businesses can continue to have access to credit, said Deputy Prime Minister and Finance Minister Heng Swee Keat in Parliament yesterday.
About $20 billion of loan capital has also been allocated in the $48 billion supplementary budget unveiled by Mr Heng to support companies with strong capabilities and catalyse private-sector loan capital.
The SME Working Capital Loan, which helps small and medium-sized enterprises (SMEs) in all industries access financing for cash flow, has also been updated.
The maximum loan quantum has been raised to $1 million, up from the $600,000 cap announced in Budget 2020.
The Government will work with participating financial institutions to defer principal payments for one year on loans under these two schemes, if businesses ask for it.
The Enterprise Financing Scheme - Trade Loan, which supports enterprises in areas like the financing of short-term import and export needs, will be enhanced for one year from April 1.
The maximum loan quantum is doubled to $10 million and the Government's risk-share has been increased to 80 per cent, against 70 per cent before.
Interest rates for loans taken under the programmes are subject to assessments by participating financial institutions.
The Government is also increasing its subsidies to businesses for loan insurance premiums - under the Loan Insurance Scheme - to 80 per cent, up from 50 per cent, to help SMEs in all industries manage their trade financing costs.
The programme helps SMEs secure short-term trade loans. The increased support will be in place for a year from April 1.
Mr Heng highlighted that the Monetary Authority of Singapore is working with banks and insurers to see how they can help businesses and individuals facing cash flow problems with their loan obligations and insurance premium payments.