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2 new schemes to help SMEs hit by Covid-19 restructure debt

SINGAPORE — Small- and medium-sized enterprises (SMEs) facing cashflow challenges due to Covid-19 will be able to restructure their debts with the rollout of two new schemes on Sunday (Nov 1).

2 new schemes to help SMEs hit by Covid-19 restructure debt

Shops along Bussorah Street seen closed on May 29, 2020. Two new schemes have been rolled out to help small- and medium-sized enterprises restructure their debts.

SINGAPORE — Small- and medium-sized enterprises (SMEs) facing cashflow challenges due to Covid-19 will be able to restructure their debts with the Association of Banks in Singapore rolling out two new schemes on Sunday (Nov 1).

From Monday, eligible businesses can seek Credit Counselling Singapore's assistance in restructuring their unsecured business debts through the Sole Proprietors and Partnerships (SPP) Scheme.

This scheme allows for lower monthly instalment payment for unsecured business borrowings by extending the loan repayment period to a maximum of eight years.

Interest rates for the restructured loans will be based on the individual loan’s original contractual terms, capped at 7 per cent per annum.

The scheme is targeted at sole proprietors and partnerships whose businesses are experiencing difficulties in servicing their loan commitments but are likely to recover.

To be eligible for the SPP Scheme, the following criteria apply:

  • Businesses must be operating as sole proprietors or partnerships

  • The total unsecured debt does not exceed S$1 million

  • The firm owes unsecured debts to two or more lenders

  • The unsecured debts are owed to the participating lenders (American Express, CIMB Bank, Citibank, DBS Bank, Diners Club, ETHOZ Capital, Goldbell Financial Services, HL Bank, Hong Leong Finance, HSBC Bank, Maybank, OCBC Bank, RHB Bank, Singapura Finance, Sing Investments & Finance, Standard Chartered Bank and United Overseas Bank)

SMEs with loans from more than one lender can apply for the Extended Support Scheme – Customised (ESS-C), which helps to restructure their credit facilities across multiple banks and finance companies.

These credit facilities include loans under Enterprise Singapore’s Temporary Bridging Loan Programme and Enhanced Working Capital Loan Scheme.

To apply for the ESS-C, SMEs may approach their lending banks and finance companies from Monday till June 30.

The current list of banks and finance companies that will offer the ESS-C are:

  • Bank of China

  • CIMB Bank

  • Citibank

  • DBS Bank

  • HL Bank

  • Hong Leong Finance

  • HSBC Bank

  • Indian Overseas Bank

  • Industrial and Commercial Bank of China

  • Malayan Banking Berhad and Maybank Singapore

  • OCBC Bank

  • RHB Bank

  • Sing Investments & Finance

  • Singapura Finance

  • Standard Chartered Bank

  • UOB Bank

More information may be found at https://abs.org.sg/sme/relief-measures/ess.

Related topics

banks SME debt loan repayment

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