Govt gives S$2.3b in loans through enhanced business financing schemes

The government is giving an additional S$2.3 billion in loans to help local companies gain access to credit during the current economic slowdown.

Some 124,000 local firms are expected to benefit from various enhanced schemes when they take effect on December 1.

Loan Insurance Scheme (LIS) will be handy for companies if the economy gets worse. All companies can now apply for the scheme.

Previously, only smaller companies could qualify only if their group turnover was below a certain amount, which varied between listed and non-listed companies.

Among other measures announced is a new Bridging Loan Programme that gives companies credit of up to S$500,000 for working capital.

Small and medium-sized companies will continue to get loans under the Local Enterprise Financing scheme and the government will increase its loan default risk sharing from 50 to 80 per cent.

This is to ensure the financial institutions continue to lend to the small businesses.

Small businesses with fewer than 10 employees can now borrow up to S$100,000, double the amount before.

For start-ups, the government is raising the investment cap from the current S$300,000 to S$1 million under the Start-up Enterprise Development Scheme.

It will also temporarily increase the co-match ratio from the existing 1:1 ratio to 2:1 instead.

This means that start-ups will receive S$2 from the government for every one dollar an investor puts into the new firm.

And for companies expanding overseas, the government will widen the Internationalisation Finance Scheme.

Under the scheme, companies can, for example, now get financing to fund the expenses of secured projects overseas.

A listed trading company can now get S$200 million financing.

But that will be raised to S$300 million to increase the number of companies that qualify for the scheme.

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