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SINGAPORE: The lack of liquidity in global markets is hitting some companies harder than others.
Despite government action driving banks to loosen lending, family-owned businesses in Singapore said they are still having difficulty getting access to much-needed credit.
For small- and medium-sized businesses, the global financial turmoil can be a double-edged sword.
While once-in-a-lifetime expansion opportunities are being thrown up, they said their hands are tied. Tighter credit means they might just have to sit out an open goal.
The government has unveiled a US$1.5 billion package aimed at helping businesses secure credit. But according to logistics firm YCH Group, things are not easing up just yet.
Robert Yap, chairman and CEO of YCH Group, said: "I spoke with the minister about how the government should go about instead of just giving the recent package to help credit flow easily to our local companies.
“You can do all that but if banks don't want to lend, then it's a problem. We don't want good companies to be sidelined because of this credit crunch, not so much on just survival but some companies would have great opportunities at this time. The external environment now is probably a godsend in terms of opportunities.”
He spoke to Channel NewsAsia on the sidelines of a family business conference on Monday. Senior Minister of State for Trade and Industry S Iswaran was also present at the conference.
Mr Yap added that he is finding some ways to make the best of these leaner times such as sending staff for training.
On top of a common set of challenges like tighter credit that all businesses face in the current economic crisis, family-owned businesses face their own set of problems too. These include transitioning across generations and adapting new management practices.
But these family businesses also enjoy an advantage. They are generally seen as more closely-knit than others.
Richard Lyons, Dean of Haas School of Business, UC Berkeley, said: "That gives (family-owned businesses) a certain resilience. It keeps people bound to the organisation and connected. They can band together and meet the challenge in a tighter way than a corporate sort of organisation. That's an important part of how they will weather the downturn.”
This works out well for employees who are not part of the extended family.
YCH Group said it does not plan to retrench anyone as firing workers would be akin to cutting off a family member. - CNA/vm
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