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SINGAPORE: There has been a jump in the number of small- and medium-sized firms seeking financial help through government-assisted schemes after the government unveiled a S$2.3 billion package two weeks ago to help businesses get credit.
Aalst Chocolate is one of many SMEs in Singapore that are facing challenges from the global credit crunch. It has been facing a credit squeeze over the past few months and is now hoping to benefit from the enhanced financing schemes announced by the government.
The chocolate-maker plans to apply for help under the Local Enterprise Finance Scheme (LEFS), as well as the Bridging Loan Programme.
Under the LEFS, the government takes an increased loan default risk sharing of 80 per cent, while the new Bridging Loan Programme gives companies credit of up to S$500,000 for working capital.
So far, more than 700 firms have made enquiries over the past two weeks – more than double the average number of calls received by EnterpriseOne, a multi-agency initiative managed by SPRING Singapore.
Senior Minister of State for Trade and Industry S Iswaran said: "The fact that there's been such a surge of interest is already a good sign. It means the announcements have been effective in targeting certain needs within the business community."
Going by past experience, more SMEs are expected to tap into the new schemes.
Choy Sauw Kook, SPRING Singapore's group director for enterprise capabilities, said: "Between 2001 and 2004, there was an average of about 73 per cent increase in terms of the loan approvals. So we believe that with these enhancements, many companies out there will be able to tap into the various business financing schemes that are available."
The enhancements announced include increasing loan quantum, raising government risk sharing of loan defaults and extending business financing schemes to all local firms.
Aalst Chocolate's CEO, Richard Lee, said the new measures will help its business.
"We are able to continue to grow, continue to expand our capacity, enhance our whole production facility. Another very important thing is business innovation – new product development, design and packaging enhancement... all these will not be obstructed," he said.
Some 124,000 local firms are expected to benefit from the various enhanced loan schemes.
- CNA/so
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