SMEs in Singapore offered flexibility in loan repayment
To provide support for SMEs facing cashflow difficulties, and to provide a gradual transition to full loan repayments, the Monetary of Singapore (MAS) has moved to defer loan repayments to 2021.
Companies can apply to defer principal repayments on their secured loans granted by banks or finance companies until Dec 31, 2020. Under the Extended Support Scheme, businesses in sectors most affected by the COVID-19 pandemic will be allowed to defer 80% of principal payments until June 30, 2021.
The sectors eligible for this include, aviation and aerospace, tourism, hospitality, conventions and exhibitions, built environment, licensed food shops and food stalls, qualifying retail outlets, arts and entertainment, marine and offshore, and land transport.
Companies outside of the identified sectors can apply to defer 80% of principal payments until March 31, 2021. More than 5,400 applications have been made to defer principal payments on secured term loans as of August.
The MAS, however, urged SMEs who are able to resume paying loan instalments in full to start doing so from January 1, 2021. This, said Ravi Menon, MAS’ managing director, will prevent against the accumulation of more debt.
He added, “A good outcome is one where individuals and SMEs are able to use the support measures to help them tide through the current economic difficulties and emerge with a sustainable debt burden as the economy recovers.”