{"id":3884,"date":"2020-04-03T10:50:15","date_gmt":"2020-04-03T02:50:15","guid":{"rendered":"https:\/\/dollarsandsense.sg\/business\/?p=3884"},"modified":"2021-03-16T16:32:18","modified_gmt":"2021-03-16T08:32:18","slug":"covid-19-relief-measures-for-smes-ways-banks-finance-companies-are-helping-businesses-manage-cashflow-constraints","status":"publish","type":"post","link":"https:\/\/dollarsandsense.sg\/business\/covid-19-relief-measures-for-smes-ways-banks-finance-companies-are-helping-businesses-manage-cashflow-constraints\/","title":{"rendered":"COVID-19 Relief Measures For SMEs: 3 Ways Banks & Finance Companies Are Helping Businesses Manage Cashflow Constraints"},"content":{"rendered":"\n

The Covid-19\npandemic is increasing in intensity. To contain the virus, stringent measures such\nas social distancing are in place. Around the nation, alternating seats are\nmarked, often in tape, to remind customers to stay 1 meter apart. <\/p>\n\n\n\n

The pandemic has\nseverely curtailed economic activity. With a sudden decline in demand and\ndisruption in supply chains, the economy is expected to remain weak, according\nto the Monetary Authority of Singapore (MAS).<\/p>\n\n\n\n

To help SMEs\ntide over such tough times, MAS worked with the Association of Banks in\nSingapore, the Life Insurance Association, the General Insurance Association,\nand the Finance Houses Association of Singapore on the package of measures.<\/p>\n\n\n\n

Additionally, MAS has collaborated with bank and finance companies to ease financial strain for businesses. <\/p>\n\n\n\n

The relief\nmeasures for SMEs are on an opt-in basis. <\/p>\n\n\n\n

#1 Deferred\nPrincipal Payments on Secured SME Loans <\/strong><\/h3>\n\n\n\n

SMEs can opt to\ndefer principal payments on fully secured term loans, up to 31 December 2020.\nThis is subjected to the banks\u2019 and finance companies\u2019 assessment of the\nquality of the SMEs\u2019 security. <\/p>\n\n\n\n

Certain SMEs\ncan also choose to extend loan term by up to the corresponding period of\ndeferment. For instance, MAS explains that if you opt into the relief measure\non 1 July 2020, and the loan tenure ends on 1 September 2020, you can choose to\nextend the loan tenure by 6 months, till end-February 2021. <\/p>\n\n\n\n

It is\napplicable only for SMEs who continue to pay interest and are in good standing\nwith their banks and finance companies. That means borrowers who are not 90\ndays past due on loan repayments as of 6 April 2020.<\/p>\n\n\n\n

It is estimated\nthat more than $40 billion of loans are likely to qualify for this relief\nscheme. <\/p>\n\n\n\n

This measure\nonly applies to term loans, but for other types of loans, banks and finance\ncompanies will \u201cmake efforts to support their customers\u201d. <\/p>\n\n\n\n

SMEs who wish\nto adjust loan repayment schedules of other types of loans can consider\nreaching out to their respective banks and finance companies.<\/p>\n\n\n\n

Deferring\npayment loans does not absolve businesses and individuals of their obligations\nto pay them. <\/p>\n\n\n\n

MAS warns that\n\u2018deferring payment increases future obligations\u2019. Repayment deferments and\ntenure extensions will result in a higher total interest cost over the course\nof the loan. You should weigh your options carefully before applying for\ndeferment.<\/p>\n\n\n\n

Read Also: <\/em><\/strong>5 Ways To Boost Your Employees\u2019 Morale \u2013 And Why It\u2019s Important To Do So<\/em><\/strong><\/a><\/p>\n\n\n\n

#2 Lower\nInterest On SME Loans<\/strong><\/h3>\n\n\n\n

Eligible SME\nborrowers can soon expect lower interest rates on loans.<\/p>\n\n\n\n

Banks and finance companies can enjoy low-cost funding through a new MAS SGD Facility, until end December 2020. This means that banks and finance companies pay less in order to acquire funds, provided they pass on the savings to their SME borrowers.<\/p>\n\n\n\n

This is applicable for loans granted under Enterprise Singapore’s SME Working Capital Loan scheme<\/a> and Temporary Bridging Loan Programme<\/a>. <\/p>\n\n\n\n

MAS states that\nthis will potentially lower the interest rates charged to SME borrowers. <\/p>\n\n\n\n

Read Also: <\/em><\/strong>Retrenchment Should Be The Last Resort: 4 Options Companies Can Consider To Reduce Cost First<\/em><\/strong><\/a><\/p>\n\n\n\n

#3 Assistance\nwith Insurance Premium Payment<\/strong><\/h3>\n\n\n\n

SMEs can seek\nfor instalment payment plans their company\u2019s general insurance policies. (e.g.\nproperty, trade credit, vehicles)<\/p>\n\n\n\n

General insurance companies will work with SMEs to allow premiums to be paid in smaller amounts, while still enjoying coverage for the paid-up period. This is instead of having to pay a lump sum premium for the entire policy period at the start.<\/p>\n\n\n\n

The General Insurance Association have announced that insurers will work closely with impacted SMEs to review their financial difficulties and to consider suitable installment payment plans or other options to reduce insurance cover.<\/p>\n\n\n\n

For instance, businesses who are Great Eastern\u2019s general insurance customers can apply for assistance with installment plan payments.<\/p>\n\n\n\n

Applications open April 1 for insurers and on April 6 for banks.<\/p>\n\n\n\n

Further details\nwill be released at a later date. Stay tuned to more updates from Dollars And\nSense on this news.<\/p>\n","protected":false},"excerpt":{"rendered":"More help has arrived for SMEs facing cashflow difficulties.\n","protected":false},"author":3,"featured_media":3889,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[92],"tags":[183,182,219],"yoast_head":"\nCOVID-19 Relief Measures For SMEs: 3 Ways Banks & Finance Companies Are Helping Businesses Manage Cashflow Constraints | DollarsAndSense Business<\/title>\n<meta name=\"description\" content=\"The MAS has announced support measures for SMEs to help tide over tough times. 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