Small and medium-sized enterprises (SMEs) have had been facing the money issue for several years now, but this year SMEs in Singapore have been granted greater access to financing 1st June onwards as SPRING Singapore announced SME Working Capital Loan.
The Working Capital Loans will be offered by 12 participating financial institutions (PFIs). SPRING Singapore will co-share 50% of loan default risks with PFIs and, SMEs can apply for unsecured term loans of up to S$300,000 each.
According to the press release, to be eligible for the SME Working Capital Loan program SMEs must be registered and operating in Singapore with a minimum of 30% local shareholding. Also, group annual sales turnover should not be more than S$100 million and employees cannot exceed headcount of two hundred.
Mr. Ho Meng Kit, Chief Executive Officer of the Singapore Business Federation (SBF) said,
More than half of the companies polled in SBF’s National Business Survey 2015/16 faced financing issues. Moreover, SMEs, by virtue of their scale, often face obstacles obtaining credit from banks and financial institutions. Despite their financing challenges, SMEs are keen to expand and restructure. The SME Working Capital Loan offers a welcome relief for some of these SMEs, enabling them to address their immediate financial concerns as they look for growth opportunities.
In a phase where three in five companies have plans to increase their investment for business expansion for productivity improvements, this program will be of immense help by addressing the big issue of cash flow concerns which hinders the scope of continuous growth. Indeed, there is a growing sense in the business community that this is not a tough period, SMEs can simply wait out until the economy improves.
Ms. Chew Mok Lee, Assistant Chief Executive of SPRING Singapore also addressed the issue saying,
We will continue to monitor SMEs’ financing needs vis-à-vis economic conditions, and adjust our schemes to address situational changes.
The Government has taken a great step in favour of SMEs but in order to survive they should come up with innovative offerings, explore new markets and find better ways of sustainability and profit making.