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SINGAPORE – Help is available for small businesses that are in financial distress due to Covid-19.
An initiative will help sole proprietors or partnerships restructure unsecured debt, such as credit card bills or secured unsecured loans.
Another plan will help small and medium-sized enterprises (SMEs) establish their credit lines with several banks and finance companies at the same time.
The two schemes, both from the Singapore Banking Association (ABS), come amid concerns that companies in the worst-hit industries could slip into bankruptcy once the above support measures begin to wane when Singapore reopens. .
The Justice Ministry had introduced several measures to alleviate the impact of the crisis on companies, including a moratorium on legal actions on rentals and contracts, and increasing the thresholds for bankruptcy and insolvency proceedings.
It will also introduce programs to help companies with annual revenues of $ 1 million to 10 million to restructure or pay off their debt.
The ABS sole proprietorship and partnership scheme aims to complement this by targeting companies that are struggling to meet loan commitments, but are likely to recover with time and revised repayment terms.
It was developed with the support of several member banks of ABS, the Monetary Authority of Singapore and Enterprise Singapore, among others.
The scheme will allow companies to work with Credit Counseling Singapore, a non-profit organization, to help restructure unsecured debt owed to 17 participating lenders, including all of the major banks here.
Businesses can work to secure lower installment payments for unsecured loans by extending the loan repayment period up to a maximum of eight years.
Interest rates for restructured debt will be based on the original contractual terms of the loan, subject to a maximum of 7 percent per annum.
A business may qualify if its total unsecured debt does not exceed $ 1 million and it must also have unsecured debt with two or more of the participating lenders.
Approval will be at the sole discretion of the lenders.
ABS’s other initiative, called the Custom Extended Support Plan, is available to SMEs with viable businesses.
It has been developed with the support of the Singapore Finance Houses Association to help restructure a company’s credit lines at various banks and finance companies, including loans under the Enterprise Singapore Temporary Bridge Loan Program and the Enhanced Working Capital Loan Scheme.
Both schemes will be open for application starting Monday (November 2).
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