SMEs looking to expand their business or keep their businesses afloat can still apply to the Temporary Bridging Loan Programme (TBLP) until 30th September 2022.
The government’s program cushions local businesses from the economic hardships and upheavals due to the COVID-19 pandemic. This initiative aims to let eligible enterprises borrow the capital they require to keep their business running despite the tough times they might face in the current economic conditions.
What Is the Temporary Bridging Loan Programme?
Started in March 2020, the TBLP is an enhanced enterprise financing scheme backed by the Singaporean government to relieve businesses from the economic conditions they face due to the pandemic.
To entice financial institutions to take up the idea of providing loans to Singapore SMEs at a low-interest rate, the government agreed to take a 70% risk share for any loans provided under the programme terms. By doing this, the institutions become more willing to furnish the loans.
Each business taking up the loan is expected to repay the loan in its entirety, the accrued interest. However, the government will meet its risk share obligations when default occurs.
Since its inception in 2020, the programme has undergone a few extensions. The recent one allows businesses to borrow a maximum loan quantum of $1M in working capital loan, which should be paid back within five years.
Additionally, the interest rate for the loan has been capped at 5.5%, meaning no participating financial institution (PFI) can charge more than this.
At A Glance
|Amount||Enterprises access working capital up to 1M for businessesUp to 20M for borrower groups|
|Interest Rate||It can vary from one PFI to another but is capped at 5.5% Per Annum.|
|Risk-Share||The government’s risk share is 70% of the principal loan amount.|
|Tenure||Maximum repayment period of Five years|
|Availability||Available until 30th September 2022|
|Eligibility Requirements||Any business entity registered with ACRA and physically present in Singapore. AND 30% or more equity of the business entity held by a permanent resident or citizen of Singapore.|
How Does The TBL Work?
The loan funds are not provided by the government but rather by the participating financial institutions. The government covers only 70% of the risks if the borrowing entity defaults.
Therefore, a business entity has to apply for a temporary bridging loan from one of the 16 banks. The approval of the temporary bridging loan application also depends on the institution.
The constants are the maximum a business can borrow 1M and 20M for borrower groups pending approval from the banks. Also, the interest rate is capped at 5.5% PA, and the maximum repayment period is five years.
Who Can Apply for TBL?
ACRA-approved businesses physically present in Singapore can apply for the temporary bridging loan. Additionally, 30% or more of the equity in the enterprise applying for a loan should be in the hands of Singaporeans.
Apart from the above eligibility criteria, the business entity applying must meet the requirements set by the institution applying for the loan. They are also expected to give a personal guarantee (PG) of 100% of the loan amount.
Step by Step Application Process
- First, interested enterprises must obtain the Temporary Bridging Loan Programme application forms from a PFI or download them online from the Enterprises Singapore official government website.
- Complete the form and provide any additional documentation required.
- Send the application to your participating financial partner of choice.
- The PFI will review the application for approval based on their credit criteria.
- If the application is approved, you will get a Letter of Offer.
- If everything is as you would like, accept the offer, and the loan will be disbursed.
List Of Participating Financial Institutions For TBLP
Below is the current list of all temporary bridging loan programme participating financial institutions:
- DBS Bank Ltd
- CIMB Bank Berhad
- ETHOZ Capital Pte Ltd
- The Hong Kong and Shanghai Banking Corporation
- GoldBell Financial Services Pte Ltd
- IFS Capital Ltd
- Hong Leong Finance Ltd
- Maybank Singapore Ltd and Malayan Banking Berhad, Branch in Singapore
- OCBC Bank (Oversea-Chinese Banking Corporation Ltd)
- ORIX Leasing Singapore Pte Ltd
- RHB Bank Berhad
- Resona Merchant Bank Asia Ltd
- Singapura Finance Pte Ltd
- Sing Investments & Finance Ltd
- United Overseas Bank Ltd
- Standard Chartered Bank
TBLP Frequently Asked Questions
What is the main aim of TBLP?
The temporary bridging loan program is aimed at cushioning enterprises from cash flow problems due to the economic conditions brought by the pandemic. The loan seeks to provide the business with money to run its operations as the economy gradually recovers from the effects of COVID-19.
What are the critical parameters of TBLP?
The scheme was first introduced on 6th April 2020 during the Solidarity Budget. The government risk share was 90% of the principal repayment in case of a default. The terms would apply from 8th April 2020 through to 31st March 2021.
On 12th October 2020, the government extended the TBLP period from 1st April 2021 to 30th September 2021. However, the government lowered its risk share to 70% and the maximum loan quantum lowered to 3M.
On 5th July 2021, the previously extended TBLP period was further from 1st October to 31st March 2022. The parameter, including the interest rates, stayed as per the previous extension.
Again, the government announced an extension of the Temporary Bridging Loan Programme in 2022. The extension period was from 1st April to 30th September 2022. The government risk share remained at 70%, the interest rate was capped at 5.5%, and the maximum temporary bridging loan quantum was reduced to 1M. Find out more on how a bridging loan in Singapore can help you close your deal on your second property.
Can a business apply for the Temporary Bridging Loan Programme using different participating financial institutions?
Eligible businesses can apply for the TBLP loan multiple times and through different PFI. The only requirement is that the total amount of the TBLP loan cannot exceed 1M.
Is a business allowed to take an additional loan if they have another TBLP loan?
This is allowed. A business could take a new loan per the extended programme even if it had previously taken a Temporary Bridging Loan Programme loan. However, the total loan amount cannot exceed 1M per the latest loan programme terms.
What does the 70% government risk share mean for the borrower and the PFI?
This means the government can cover up to 70% of the principal loan amount should the borrowing entity default. However, this does not imply that the borrower is supposed to pay only 30% of the loan but rather the entire loan plus interest.
Participating financial institutions will still require the borrower to put forward a Personal Guarantee (PG) of 100% of the requested loan amount. The guarantee is security for the loan and shows that the borrower intends to meet the agreed-upon repayment terms.
In case defaults occur, the PFIs will first use the standard commercial recovery procedure to try and get back the unrecovered amount, in addition to security realisation, before approaching Enterprise Singapore.
The Temporary Bridging Loan Programme is available to Singapore business enterprises that want to boost their cash flow. Some of the main takeaways regarding the programme include:
- It is only eligible for business entities in Singapore that have been in business for more than six months.
- 30% equity in the business should be held by Singapore citizens or permanent residents of the country.
- Businesses can access a maximum loan quantum of 1M and business groups up to 20M. The highest interest rate banks and other PFIs can charge is 5.5%.
- The current period for eligible enterprises applying for the loan programme ends on 30th September 2022.
- Application and approval of the loan are subject to the credit terms of the banks.
If you don’t qualify for a Temporary Bridging Loan Programme, licensed moneylenders such as Fortune Credit can help you secure a business loan up to $200,000 to help you boost your business. Request a loan quote or apply today and get your loan approved on the same day!