Temporary Bridging Loan & How Will it Help Businesses_

What is a Temporary Bridging Loan & How Will it Help Local Businesses?

As the COVID-19 pandemic continues to curtail economic activity in many parts of the world, the falling external demand coupled with factors such as supply chain disruptions has led to an overall contraction of Singapore’s economy. This has caused many SMEs in Singapore to bear the brunt of the economic fallout especially with customers staying home, resulting in reduced spending globally.

With uncertain times ahead of us, many SMEs in Singapore will continue to face financial constraints when it comes to maintaining their cash flows and meeting their financial obligations. For companies that are reviewing their current cash flows and exploring financing options in Singapore, there are many measures introduced by the government to help businesses address their urgent financial concerns. If you’re looking for a financing option to help manage any urgent business needs, the Temporary Bridging Loan Programme (TBL) will be a suitable option for you. Keep reading to find out everything you need to know about this scheme.

The Temporary Bridging Loan Programme (TBL)

The Temporary Bridging Loan Programme (TBL) is a government-assisted financing scheme for SMEs in Singapore, introduced in Budget 2020. This scheme is available to all sectors and provides working capital to fund your business needs given the current economic climate in Singapore.

Eligibility

In order to be eligible for this scheme, you have to be a business entity registered and physically present in Singapore with at least 30% of equity held by Singaporeans or Permanent Residents residing in Singapore. Do note that the approval of the loan will be decided after an assessment by the Participating Financial Institutions (PFI) involved in the scheme.

Features

The Temporary Bridging Loan provides working capital funding of up to $5 million to help you with your business needs. The interest rate for this will be capped at 5% effective p.a., from the PFIs. Enterprise Singapore also provides a 90% risk-share on the loans for any new applications that are initiated from 8 April up till 31 March 2021.

SMEs can even apply to defer their principal repayments for up to 12 months to assist them in managing their debt. This deferral will also be subject to approval by the PFIs after further assessment.

How To Apply

Currently, there are 15 financial institutions that are participating in this scheme. However, the credit criteria and interest rates may differ for each of the PFIs, which is why it is crucial to select a suitable PFI to avoid rejection of your application for the loan. SMEs in Singapore can also approach different PFIs to apply for multiple loans, However, do note that eligible companies can only borrow up to $5 million dollars even if you decide to obtain multiple loans from different PFIs.

In order to apply for the temporary bridging loan, simply approach the PFIs that are listed in this scheme to discuss your options. ETHOZ Capital is one of the PFis involved in the TBL and our relationship managers can provide you with detailed information on the loan rates as well as the eligibility terms to ensure that your application gets approved as quickly as possible — allowing you to tackle any financial challenges you are currently facing due to the COVID-19 outbreak.

How Will TBL Help SMEs

As the global pandemic caused by the novel coronavirus rages on, it is essential for companies to act fast and consider their financing options in order to persevere and tackle the economic crisis head-on. With the slowing economy, it is important for companies to strategise and manage their working capital efficiently — especially vulnerable businesses who are running on low cash reserves.

TBL was introduced by the government in response to the COVID-19 outbreak to help local businesses manage their immediate cash flow concerns. In times of financial instability, this scheme allows SMEs to shift their business priorities to addressing cash flow challenges and liquidity instead of merely focusing on profits and losses.

As the world adjusts rapidly to adapt to changing times, it has become more important than ever for businesses to stay relevant and this will be difficult to achieve if the company is faced with unstable cash flows. TBL helps companies out with this by addressing their most urgent business needs so that they can focus on other aspects such as adapting and reinventing to bounce back from this crisis in the long run.

Financing In Singapore

As with most businesses in Singapore, navigating financial obstacles to keep your operations running smoothly is not easy — especially in a time like this where the whole world has been plagued by economic inactivity. TBL scheme is a great opportunity for companies who’re looking for financing options to keep their business afloat.

If you’re unsure about the eligibility criteria and require assistance, our experienced relationship managers at ETHOZ Capital can help you out with this and guide you on what needs to be done for your loan application to be approved quickly. Simply give our team at ETHOZ a call at 6654 7799 or drop us an email at contactus@ethozgroup.com today!

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