Must be Singapore registered SME company and at least 1 year in business Annual turnover $100k and more Group employment size of not more than 200 employees Minimum 30% shareholding by Singaporean or Singapore PR

TEMPORARY BRIDGING LOAN

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This pandemic has resulted in many companies struggling to obtain cashflow and funding. Therefore, Enterprise Singapore has came out with a Temporary Bridging Loan scheme which reduces the risk of the bank and in return, the bank will charge a lower interest rate to the business owners.

With extra support from the government, the Temporary Bridging Loan can help businesses get through the downturn.

The Temporarary Bridging Loan Programme (TBLP) will be extended with revised parameters for another six months – from April 1 to Sept 30, 2022. They were previously extended in October 2011 last year to March 31, 2022

There are 17 financial institutions (FIs) participating in this programme and the Credit criteria & interest rates are different for all banks. However, it is tough to get an approval from the banks nowadays due to the market sentiments and the strict guidelines from the banks.

In Bizsquare, we provide obligation-free consultations on how you can tap on into the different types of government support to fund your firm. We have confidence to help our clients overcome all their difficulties in getting the loan approved. Most importantly, we only charge upon success which means that our interest is in line with you.

HOW DOES THE TEMPORARY BRIDGING LOAN (TBL) WORK?

The Temporary Bridging Loan Programme allows eligible businesses to borrow up to SGD$3 million, with a repayment period of up to 5 years. Under the scheme, interest rates charged by Participating Financial Institutions (“PFIs”) are capped at a maximum interest rate of 5% per annum. Depending on your company’s credit history and financial performance, you may be able to enjoy an interest rate of as low as 3% per annum.

The TBLP is known as a government-assisted loan programme because the government will take on 70% of the risk-share on new loans. In the event of a default, the PFIs can make a claim against Enterprise Singapore for the unrecovered amount in proportion to the risk-share undertaken by the government.

For example, if a business takes a loan of SGD$500,000 and defaults on payments, the PFIs will first follow their usual commercial recovery procedure. Assuming that the PFI is only able to recover SGD$400,000 under its usual commercial recovery procedure, the PFI will then make a claim of SGD$70,000 (equivalent to 70% of SGD$100,000) from Enterprise Singapore.

REASONS COMPANIES MIGHT CONSIDER TAKING UP THE TEMPORARY BRIDGING LOAN (TBL)

The Temporary Bridging Loan Programme provides low-cost working capital loans for businesses during this Pandemic Period. While long-term profits are important to build a sustainable business, it’s short-term cash flow that will determine if a company survives.

Temporary Bridging Loan can be used for different business purposes during this period. Expenses could include paying salaries to your workers to retain and support them during this challenging period, or other short-term expenses for the company to continue operating. This includes rental, marketing costs and raw materials that are needed for your products.

One of the good things about TBL is that you can pay-off your outstanding loan anytime with no penalty. This gives business owners the flexibility to use the loan for both short-term and long-term purposes.

CRITERIA TO APPLY FOR TEMPORARY BRIDGING LOAN

As a government-assisted loan, only Singapore companies which fulfil the following requirements are eligible to apply for this loan:

1. At least 30% of shares held by Singaporeans or Permanent Residents; and
2. Registered and physically present in Singapore.
3. Besides meeting the eligibility criteria prescribed by the Singapore government, eligible businesses will also be subject to the standard credit assessment criteria set in place by the banks that are disbursing these loans.

While no collateral is required, banks will require a 100% Personal Guarantee for the loan. This means that if the business fails to repay the loan, the person who guarantees the loan (usually the founder or a director of the company) is liable to pay the outstanding amount.

Interested enterprises can apply through Bizsquare.

TEMPORARY BRIDGING LOAN

The Temporary Bridging Loan Programme (TBLP) provides access to working capital for business needs.

Risk Share

Risk share is at 70%; The borrower is responsible to repay 100% of the loan amount. When defaults occur, the Participating Financial Institutions (PFIs) are obligated to follow their standard commercial recovery procedure, including the realisation of security, before they can make a claim against Enterprise Singapore for the unrecovered amount in proportion to the risk-share

Eligibility

Must be Singapore registered SME company and at least 1 year in business
Annual turnover $100k and more
Group employment size of not more than 200 employees
Minimum 30% shareholding by Singaporean or Singapore PR

How to apply for Temporary Bridging Loan

Call and meet our consultants for professional advice.
Bring the follow supporting documents for the meeting:

Bank Statement
Financial Statements
Personal income tax assessment of owners and directors

What is the objective of the Temporary Bridging Loan Program (TBLP)? What are the key scheme parameters?

The TBLP was introduced to help the enterprises access working capital. As announced in the Solidarity Budget on 6 Apr 2020, the Government will enhance the TBLP further with 90% risk share.

The enhancement will apply to new applications initiated from 8 April 2020 until 31 March 2021.

For applications that are pending approval from PFIs, enterprises are advised to speak to their Participating Financial Institutions (PFIs) on their eligibility. As announced on 12 Oct 2020, TBLP will be extended from 1 Apr 2021 to 30 Sep 2021. Under this extension, the Government’s risk-share on the loan will be lowered to 70% with the maximum loan quantum lowered to S$3 million.

This is to calibrate the support for businesses as the economy gradually recovers. As announced on 5 Jul 2021, TBLP will be further extended for 6 months, from 1 Oct 2021 to 31 Mar 2022, under the same parameters.

Can enterprises take out another loan under the extended programme if they had previously taken a TBLP loan or other EFS loans?

Yes, enterprises that had previously taken a TBLP loan, can still apply for a new loan under the extended programme, provided its total exposure to the programme is capped at the maximum amount of S$3 million Enterprises can apply for a TBLP loan on top of other EFS loans it has already taken out.

Can enterprises apply for the TBLP multiple times with different PFIs?

Yes, enterprises can approach different PFIs to apply. However, the total aggregate amount borrowed under the scheme from different PFIs is capped at the maximum amount of S$3 million.

Besides TBLP, can companies apply for the Enhanced Enterprise Financing Scheme Trade Loan (Enhanced EFS-TL) and other EFS loans at the same time?

Enterprises can apply for all the schemes if they meet the criteria for each scheme, subject to assessment by PFIs.

PFIs are not willing to approve my company’s loan application even though it is eligible for the TBLP. What can I do?

All eligible enterprises applying for the TBLP are subject to credit assessment by PFIs. No guarantee in loan application and PFI will still be the one decides.

Since Enterprise Singapore provides 70% risk share on the loan, does it mean that the borrower/ guarantors are only responsible for the remaining 30% of the loan?

No. The borrower and guarantors are responsible to repay 100% of the loan amount. When defaults occur, PFIs are obligated to follow their standard commercial recovery procedure, including the realisation of security, before they can make a claim against Enterprise Singapore for the unrecovered amount in proportion to risk-share.

Why do banks require a 100% Personal Guarantee (PG) when the goverment covers 70% of the loan amount?

A PG is not only a means of security but signals a commitment by the guarantor(s) that they are committed to the loan obligation.

LET US GET YOUR FUNDING FOR YOU NOW!

Enabling our clients’ business growth and promoting a long-term relationship with them is key. We can assist you with the necessary funding for your business needs to get through this tough time. Fill up the form below and we will get in touch with you shortly.