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Singapore: SMEs to benefit from two new schemes amid COVID-19 outbreak

Singapore: SMEs to benefit from two new schemes amid COVID-19 outbreak
Singapore: SMEs to benefit from two new schemes amid COVID-19 outbreak

Small businesses in Singapore, which are in financial distress owing to the unexpected outbreak of COVID-19 can now receive help in a bid to revive their respective profit trajectories through two new schemes from Association of Banks in Singapore, cited sources with relevant information.

The two schemes, which are introduced by Association of Banks in Singapore, come amidst fears that businesses are facing significant monetary repercussions and can collapse into bankruptcy owing to the ongoing coronavirus pandemic.

Reportedly, one scheme would help single owners or partnerships in reorganizing unsecured debt, such as loans or credit card bills which are secured without collateral. Meanwhile, the second initiative will aid small and medium-sized enterprises (SMEs) sort out their credit facilities all at once through various financial institutions.

It is to be noted that several steps have been taken by the Law Ministry to reduce the effect of the crisis on companies, including a suspension on legal action on leases and contracts along with a rise in the thresholds for insolvency and bankruptcy proceedings.

Singapore authorities also intend to launch services to support firms with yearly revenue between USD 1 million and USD 10 million in order to restructure or wind up debt, sources claimed. The ABS Sole Proprietors and Partnerships framework aims to supplement this by concentrating on firms that are making efforts to fulfill loan obligations.

For the record, the ABS Sole Proprietors and Partnerships framework was established with the help of several ABS member banks, Enterprise Singapore, and the Monetary Authority of Singapore, among others.

By extending the loan maturity duration up to a maximum of eight years, businesses will work towards achieving low monthly instalment payments for unsecured borrowings, sources confirmed. Moreover, interest rates with respect to the restructured debt are based on original contractual terms of the loan and will be subject to a maximum of 7% annually.

Source- https://www.straitstimes.com/singapore/politics/small-business-to-get-help-in-restructuring-debts-under-two-new-schemes