Are you a small or medium-sized enterprise (SME) struggling to keep your business afloat during the COVID-19 pandemic? If so, you may be eligible for the Temporary Bridging Loan Programme (TBLP) in Singapore. This government-backed scheme provides companies with access to working capital to help them manage their cash flow needs and navigate the financial challenges posed by the pandemic.
The TBLP was first introduced in March 2020 and has since been extended several times. The program has been revised to provide greater support for businesses that continue to face the impact of COVID-19 and rising business costs. With a maximum loan quantum of SGD 5 million and a repayment period of up to five years, the TBLP offers a lifeline for SMEs that need financial assistance to stay afloat. In this guide, we’ll provide an overview of the TBLP, including eligibility criteria, loan details, application process, and additional financial support available for businesses in Singapore.
Key Takeaways
- The Temporary Bridging Loan Programme (TBLP) provides SMEs in Singapore with access to working capital to manage their cash flow needs during the COVID-19 pandemic.
- The TBLP has been revised several times since its introduction in March 2020 to provide greater support for businesses facing financial challenges.
- SMEs can apply for loans of up to SGD 5 million with a repayment period of up to five years, and additional financial support is available for businesses in specific sectors.
Overview of the Temporary Bridging Loan Programme
If you are a business owner in Singapore, you may be eligible to apply for the Temporary Bridging Loan Programme (TBLP). This government-backed scheme was introduced in March 2020 to help businesses cope with the financial impact of the COVID-19 pandemic. In this section, we will provide an overview of the TBLP, including its purpose and key features.
Purpose of the TBLP
The TBLP is designed to provide temporary financing support to businesses that are facing cash flow difficulties due to the COVID-19 pandemic. The programme aims to help businesses maintain their operations, retain their employees, and continue to serve their customers during this challenging period.
Key Features of the TBLP
The TBLP is administered by Enterprise Singapore, a government agency that supports the growth of Singaporean enterprises. Here are some of the key features of the TBLP:
- Maximum loan quantum: Borrowers can borrow up to S$3 million across 19 participating financial institutions.
- Interest rates: Interest rates are capped at 5% per year.
- Repayment period: The maximum repayment period is 5 years, but borrowers are given an option to defer the principal repayment up to 12 months.
- Government risk-share: The government provides a risk-share of up to 70% of the loan amount to the participating financial institutions.
- Eligibility criteria: To be eligible for the TBLP, businesses must be registered and physically present in Singapore, have at least 30% local equity, and be adversely affected by COVID-19.
- Loan purposes: The TBLP can be used to finance working capital needs, such as inventory, wages, and rent, as well as capital expenditure needs, such as the purchase of equipment and machinery.
In summary, the TBLP is a government-backed scheme that provides temporary financing support to businesses that are facing cash flow difficulties due to the COVID-19 pandemic. The programme offers attractive interest rates, a long repayment period, and a government risk-share to the participating financial institutions. If you are a business owner in Singapore, you may want to consider applying for the TBLP to help your business weather the current economic storm.
Eligibility Criteria
To be eligible for the Temporary Bridging Loan Programme (TBLP), your business must meet certain criteria. This section will outline the eligibility requirements for the programme.
Eligible Businesses
The TBLP is available to local enterprises, including sole proprietorships, partnerships, limited liability partnerships, and companies. Borrowers can apply for loans of up to SGD$5 million, with a repayment period of up to 5 years.
Qualifying Conditions
To qualify for the TBLP, your business must meet the following conditions:
- Your business must be registered and physically present in Singapore.
- Your business must have at least 30% local equity.
- Your business must have been in operation for at least 6 months.
- Your business must have a good credit standing with its participating financial institution (PFI).
- Your business must have been adversely affected by COVID-19.
It is important to note that the TBLP is subject to the credit assessment of the PFI. The PFI will assess the borrower group’s creditworthiness and viability of the business before approving the loan.
In summary, to be eligible for the TBLP, your business must be registered and physically present in Singapore, have at least 30% local equity, have been in operation for at least 6 months, have a good credit standing with its PFI, and have been adversely affected by COVID-19. If your business meets these criteria, you may be eligible to apply for the TBLP and receive much-needed financing to help your business navigate through these challenging times.
Loan Details
If you’re a Singaporean business owner looking for financial assistance, the Temporary Bridging Loan Programme (TBLP) could be the solution you need. This government-assisted financing scheme was first introduced in Budget 2020 to help enterprises in the tourism sector. Since then, it has been expanded to cover all sectors, and it has helped many businesses stay afloat during these challenging times.
Loan Quantum and Interest Rates
Under the TBLP, eligible businesses can borrow up to SGD 5 million. The loan amount is subject to the participating financial institution’s assessment of the borrower’s creditworthiness. The interest rates charged by these institutions are capped at a maximum of 5% per annum. This interest rate cap provides a reasonable borrowing cost for businesses in need of working capital.
Repayment Terms
The repayment period for the TBLP is up to 5 years. This period includes a 1-year principal repayment deferment, which means that businesses can defer the repayment of the principal amount for the first year of the loan. This deferment provides businesses with the flexibility they need to manage their cash flow during the early stages of the loan.
After the deferment period, businesses can choose to repay the principal amount in equal instalments over the remaining loan tenure. Alternatively, they can choose to make a bullet repayment of the principal amount at the end of the loan tenure. This repayment option allows businesses to free up their cash flow during the loan tenure and use the funds for other business needs.
In summary, the TBLP provides eligible businesses with access to working capital to help them manage their cash flow during these challenging times. With loan amounts of up to SGD 5 million, interest rates capped at a maximum of 5% per annum, and flexible repayment terms, the TBLP is an excellent option for businesses in need of financial assistance.
Application Process
Are you interested in applying for the Temporary Bridging Loan Programme? Here’s what you need to know about the application process.
Required Documents
Before you begin the loan application process, you will need to gather the necessary documents. These documents include:
- A copy of your company’s latest ACRA BizFile report
- A copy of your company’s bank statements for the last six months
- A cash flow forecast for the next six months
- A list of your company’s outstanding debts
- A copy of your company’s financial statements for the last two years
- A copy of your company’s income tax assessment for the last two years
Make sure that all of the documents are up-to-date and accurate. Any discrepancies or missing documents could delay the loan approval process.
Approval and Disbursement
Once you have gathered all of the necessary documents, you can begin the loan application process. The first step is to submit your application through the Enterprise Singapore website.
After submitting your application, you can expect to hear back from Enterprise Singapore within two weeks. If your application is approved, you will receive the loan amount in your company’s bank account within seven working days.
It is important to note that the loan amount will be disbursed in stages. This means that you will receive the loan amount in instalments over the course of the loan period.
Overall, the application process for the Temporary Bridging Loan Programme is straightforward and easy to follow. By gathering the necessary documents and submitting your application through the Enterprise Singapore website, you can access the financing your business needs to grow and thrive.
Benefits for Businesses
If you’re a business owner in Singapore, you’ll be pleased to know that the Temporary Bridging Loan Programme (TBLP) is designed to benefit you in many ways. Here are some of the key benefits of the TBLP for businesses:
Enhancing Cash Flow
One of the most significant benefits of the TBLP is that it can help enhance your business’ cash flow. This is particularly important in today’s economic climate, where businesses are facing unprecedented challenges. With the TBLP, you can access immediate cash flow to help you meet your current business obligations. This can be especially helpful if you’re experiencing a temporary cash flow shortage, or if you need to fund a new project or opportunity.
Supporting Expansion
Another key benefit of the TBLP is that it can support your business’ expansion plans. If you’re looking to grow your business, the TBLP can provide you with the working capital you need to pursue new business opportunities. This can be especially helpful if you’re looking to expand into new markets, invest in new equipment or technology, or hire additional staff.
In summary, the TBLP is an excellent option for businesses that need to enhance their cash flow or support their expansion plans. With immediate cash flow and flexible repayment terms, the TBLP can help you take advantage of new business opportunities and grow your business.
Risks and Considerations
Understanding the Risks
Before applying for the Temporary Bridging Loan Programme (TBLP), it is important to understand the risks involved. As with any loan, there is the risk of default if you are unable to repay the loan. In addition, the loan is subject to credit approval, which means that if your credit rating is poor, you may not be eligible for the loan.
Another risk to consider is the collateral required for the loan. The TBLP requires collateral, which can be in the form of fixed assets or inventory. If you default on the loan, the collateral may be seized by the bank to recover the outstanding amount. Therefore, it is important to carefully consider the value of the collateral before applying for the loan.
Managing Repayment
Managing repayment is an important consideration when applying for the TBLP. The loan has a repayment period of up to 5 years, and interest rates charged by Participating Financial Institutions (PFIs) are capped at a maximum interest rate of 5% per annum. It is important to ensure that you are able to meet the repayment schedule to avoid default and additional charges.
One way to manage repayment is to create a repayment plan that takes into account your cash flow and business operations. This can help you to budget for the loan repayment and ensure that you have sufficient funds to meet the repayment schedule.
Another consideration is the personal guarantee required for the loan. A personal guarantee is a legal agreement that makes you personally liable for the loan if your business is unable to repay it. Therefore, it is important to carefully consider the risks involved before providing a personal guarantee.
In summary, while the TBLP can provide immediate cash flow for your business, it is important to carefully consider the risks involved and manage repayment to avoid default and additional charges.
Additional Financial Support
If you are a Singaporean enterprise looking for additional financial support, there are various financing schemes and government initiatives that you can consider. Here are some of them:
Related Financing Schemes
Aside from the Temporary Bridging Loan Programme (TBLP), there are other ESG loan schemes that you can explore. For instance, the Enterprise Financing Scheme (EFS) can help you access financing for your working capital, equipment financing, trade financing, and venture debt. The SME Working Capital Loan is another financing scheme that can provide you with up to $1 million in financing for your daily operations.
If you are looking for trade financing, the Enhanced Enterprise Financing Scheme – Trade Loan (EFS-TL) can help you access up to $10 million in financing. This scheme can also help you with your trade-related expenses such as inventory, receivables, and purchase orders.
Government Initiatives
The Singaporean government has also launched various initiatives to help businesses cope with the impact of COVID-19. For instance, the Solidarity Budget 2020 provided support to businesses through measures such as property tax rebates, rental waivers, and cash grants.
The Enhanced Enterprise Financing Scheme (EEFS) is another initiative that can help you access financing for your business needs. This scheme can provide you with up to $15 million in financing, and it can also help you with your trade financing needs.
Overall, there are many financing schemes and government initiatives that you can explore to help you with your financial needs. By taking advantage of these opportunities, you can strengthen your business and weather any challenges that come your way.
Sector-Specific Information
Assistance for SMEs
If you are a small and medium-sized enterprise (SME), the Temporary Bridging Loan Programme (TBLP) can help you access working capital to tide over the COVID-19 crisis. The TBLP provides SMEs with loans of up to SGD 5 million, with a repayment period of up to 5 years. To be eligible, your SME must be registered and physically present in Singapore, with at least 30% local shareholding. Additionally, your SME must have been established before 1 February 2020, and have a good credit standing.
Support for Specific Industries
The TBLP also offers support for specific industries that have been affected by the pandemic. For example, the TBLP has been enhanced to provide additional support for the construction sector. Under the enhanced TBLP, construction firms can borrow up to SGD 10 million, with a repayment period of up to 7 years. Additionally, the maximum loan quantum for services and other sectors has been increased from SGD 1 million to SGD 3 million per borrower.
The TBLP is available to all business entities, including sole proprietorships, partnerships, and companies. To apply for a TBLP loan, you will need to approach a participating financial institution (PFI). The PFIs will assess your loan application and determine the loan amount, interest rate, and repayment period based on your SME’s financial standing and creditworthiness.
Overall, the TBLP is a valuable resource for SMEs and specific industries facing financial difficulties due to the pandemic. With its flexible loan terms and low interest rates, the TBLP can help you access the working capital you need to keep your business afloat during these challenging times.
Long-Term Financial Planning
Congratulations on securing the Temporary Bridging Loan Programme (TBLP) for your business! With the extra working capital, you can now focus on growing your business and making it more resilient. However, it’s important to remember that the TBLP is a short-term solution, and you need to plan for the long-term financial health of your business.
Beyond the Temporary Bridging Loan
The TBLP has a repayment period of up to 5 years, but what happens after that? It’s important to have a long-term financial plan in place to ensure that your business can continue to grow and thrive. Here are some things to consider:
- Long-term financing: Look into long-term financing options that can help you fund your business beyond the TBLP. This could include equity financing, venture capital, or traditional bank loans. Make sure you understand the terms and conditions of any financing you take on, and how it will impact your business in the long run.
- Cash flow management: Good cash flow management is essential for the long-term financial health of your business. Make sure you have a solid cash flow forecast in place, and that you’re regularly monitoring your cash flow. This will help you identify any potential cash flow issues early on, and take steps to address them before they become bigger problems.
- Diversification: Don’t put all your eggs in one basket. Diversify your revenue streams and customer base to reduce your business’s dependence on any one source of income. This will help you weather any economic downturns or changes in the market.
- Cost management: Keep a close eye on your expenses, and look for ways to reduce costs wherever possible. This could include renegotiating contracts with suppliers, finding more cost-effective ways to market your business, or streamlining your operations.
Remember, the TBLP is just one tool in your financial toolkit. By taking a long-term approach to your business’s finances, you can ensure that your business is well-positioned for success, no matter what challenges come your way.
Practical Tips for Applicants
If you are planning to apply for the Temporary Bridging Loan Programme (TBLP), there are some practical tips that can help you streamline the application process and prepare for loan utilization.
Streamlining the Application
To ensure a smooth and efficient loan application process, you should prepare all the necessary documents and information beforehand. This includes details of your company’s financial statements, payroll, expenses, and utilities. Having a clear understanding of your company’s capabilities and financial needs will help you determine the loan amount and repayment period that is right for you.
To further streamline the application process, it is recommended that you work with a Participating Financial Institution (PFI) that is familiar with the TBLP. These PFIs have experience in processing TBLP applications and can guide you through the process, helping you to avoid any potential pitfalls.
Preparing for Loan Utilisation
Once your TBLP application has been approved, it is important to prepare for loan utilisation. This involves creating a detailed plan for how you will use the loan funds to support your business operations.
One key area to focus on is payroll. If your company is experiencing financial difficulties, it may be necessary to reduce your workforce. However, with the TBLP, you can use the loan funds to cover your payroll expenses, helping you to retain your employees and maintain business continuity.
In addition to payroll, you should also consider other expenses that are critical to your business operations. This may include rent, utilities, and other overhead costs. By using the TBLP to cover these expenses, you can free up cash flow and focus on growing your business.
Overall, the TBLP is an exciting opportunity for Singaporean businesses to access much-needed working capital. By following these practical tips, you can streamline the application process and prepare for loan utilisation, ensuring that your business is well-positioned for success.
Additional Resources
If you are interested in learning more about the Temporary Bridging Loan Programme (TBLP) and how it can help your business, there are several resources available to you.
Guides and Insights
To get a better understanding of the TBLP, you may want to read through some guides and insights on the subject. These resources can provide you with valuable information on the scheme’s objectives, parameters, and eligibility criteria, as well as tips on how to apply for the loan and manage your cash flow.
Some of the most helpful guides and insights on the TBLP include:
- A Guide To The Temporary Bridging Loan Programme (TBLP): This comprehensive guide covers everything you need to know about the TBLP, from its features and benefits to its application process and requirements.
- Temporary Bridging Loan Programme: How It Works And What Are The Criteria For Businesses To Apply: This article provides a detailed overview of the TBLP and explains how eligible businesses can borrow up to SGD$5 million to meet their working capital needs.
Financial Education
If you are looking to improve your financial literacy and learn more about equity, risk-sharing, borrowing costs, and cash flow issues, there are many resources available to you. These can help you make informed decisions about your business finances and improve your chances of success.
Some of the best financial education resources include:
- Enterprise Singapore’s Financial Assistance Schemes: This website provides a wealth of information on the various financial assistance schemes available to Singaporean businesses, including the TBLP.
- SGX Academy: This is a comprehensive financial education platform that offers a wide range of courses, webinars, and workshops on topics such as equity, risk management, and financial analysis.
By taking advantage of these resources, you can gain a better understanding of the TBLP and the broader financial landscape in Singapore. This can help you make informed decisions about your business finances and achieve your goals.
Frequently Asked Questions
How can I calculate my repayments for a bridging loan in Singapore?
Calculating the repayments for a bridging loan in Singapore is a relatively straightforward process. You can use an online bridging loan calculator to determine your monthly repayment amounts. The amount you can borrow and the repayment terms will depend on your business’s financial situation and the bank’s terms.
What are the current interest rates for bridging loans in Singapore’s banks?
The current interest rates for bridging loans in Singapore vary depending on the bank and the type of loan you are applying for. Under the Temporary Bridging Loan Programme, the government has capped the interest rates at 5% per annum. However, most banks are offering loans at rates between 1.5% to 2.5%. It’s important to shop around and compare different banks’ rates to find the best deal for your business.
Can the Temporary Bridging Loan Programme assist my SME during financial gaps?
Yes, the Temporary Bridging Loan Programme was introduced to help SMEs access working capital during financial gaps. The programme is designed to help businesses manage their immediate cash flow needs. Eligible enterprises can borrow up to SGD 5 million, with a repayment period of up to 5 years.
What’s the process and timeline for obtaining a bridging loan under the Temporary Bridging Loan Programme?
The process and timeline for obtaining a bridging loan under the Temporary Bridging Loan Programme will depend on the bank’s requirements and the amount you wish to borrow. Generally, you will need to submit an application form and provide supporting documents such as financial statements and business plans. The bank will then assess your application and may request further information or clarification. Once approved, the loan amount will be disbursed to your business account. The timeline for approval and disbursement will vary from bank to bank.
Is it possible to utilise my CPF savings to cover the costs of a bridging loan?
No, you cannot use your CPF savings to cover the costs of a bridging loan. CPF savings can only be used for specific purposes such as housing, healthcare, and education.
What’s the least amount I need to deposit to secure a bridging loan?
The least amount you need to deposit to secure a bridging loan will depend on the bank’s requirements and the amount you wish to borrow. Generally, you will need to provide collateral such as property or fixed deposits to secure the loan. The bank will then determine the amount of collateral required based on the loan amount and your business’s financial situation.
