S$2.3B in Loans for Singapore Companies

November 21st, 2008 · No Comments

With effect from 1st December 2008, up to 124,000 Singapore companies will benefit from the Government’s enhancement of business financing schemes to support an extra S$2.3 billion in loans to help local enterprises which are facing problems in getting credit during the existing financial turmoil. The following enhancements will take effect from 1st December 2008 and will be in place for one year.

Firstly, the government will extend the coverage of financing schemes to cover all Singapore companies. The eligibility criteria for current small & medium enterprises (SME) financing schemes i.e. the Local Enterprise Financing Scheme (LEFS) and Loans Insurance Scheme (LIS) will be temporarily loosen to enable all local companies to make use of these schemes.

Secondly, for the SMEs, the government will take on a larger proportion of their loan default risk by upping its risk sharing ratio from 50:50 to 80:20. And for larger Singapore companies, a 50:50 risk sharing ratio is introduced. Additionally, for equity investments and start-ups, SPRING will increase its dollar matching ratio for private capital from 1:1 to 2:1.

Finally, SPRING Micro Loan Programme will increase its existing maximum loan of S$50,000 to S$100,000 for Singapore companies which have less than 10 employees. The government also started a new bridging loan scheme that will be accessible to all companies with 10 employees or more. Up to S$500,000 will be made available per loan.