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Temporary Bridging Loan Programme (TBLP): Overview

Temporary Bridging Loan Programme
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Not known to many, there is a loan made specifically by the Singapore government to help owners of small and medium-sized enterprises (SMEs) in this challenging period. It’s called the Temporary Bridging Loan Programme (TBLP). 

It was introduced in the Solidarity Budget 2020. It lends capital to business owners so they can have funds to start their business ventures at a time like this.

In this article, you will learn the basics of Temporary Bridging Loans described as an SME working capital loan. If you are thinking of starting a small business, but you don’t have enough money to start it, this might be the best business loan for you. Read the details of this financing scheme in this article.

Temporary Bridging Loan Programme Features

  • Maximum loan quantum: Borrowers can borrow up to S$3 Million across 19 participating financial institutions.
  • Interest rates: Interest rate 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 1 year. Although financial institutions do not require collateral for the loan, they require a 100% personal guarantee. It means that if a business fails to repay the loan, the entity that gave a personal guarantee will be held liable to repay the amount.
  • Government risk share: Borrowers must repay 100% of the business loan. If they fail to do so, the government has to cover the risk share at 70% of the loan. The participating financial institutions have to follow their standard commercial recovery procedure before making a claim to Enterprise Singapore for the unrecovered amount.

 

Participating Financial Institutions

Eligible SMEs can apply to these 19 participating financial institutions. Note that each financial institution has its own credit and risk assessment procedure.

  • CIMB Bank Berhad
  • DBS Bank Ltd
  • ETHOZ Capital Ltd
  • FS Capital Pte Ltd
  • Goldbell Financial Services Pte Ltd
  • Hongkong and Shanghai Banking Corporation (HSBC)
  • Hong Leong Finance Ltd
  • IFS Capital Ltd
  • Innoven Capital
  • Maybank Singapore Ltd and Malayan Banking Berhad, Singapore Branch
  • ORIX Leasing Singapore Ltd
  • Oversea-Chinese Banking Corporation Ltd (OCBC Bank)
  • Resona Merchant Bank Asia Ltd
  • RHB Bank Berhad
  • Sing Investments & Fin. Ltd
  • Singapura Finance Ltd
  • Standard Chartered Bank
  • United Overseas Bank Ltd
  • Validus Investment Holdings Pte. Ltd.

 

What Can You Use the Temporary Bridging Loan for?

A Temporary Bridging Loan is meant for short-term expenses. Whether you are an SME or have a new business, you can make this type of loan application and then use it for the following reasons.

1. Emergency

At tough times like this, you can use this financing to fund your emergency business needs. Spend the money on unforeseen business expenditures.

2. Interim financing

While you are waiting for approval of a business loan application, you can use the fund you get from the TBLP in the meantime.

3. Cash flow issues

You can also use to amount to ensure your business running. TBLP can ensure constant cash flow particularly in paying the business’ payroll, rent, inventory, utilities, and other expenses.

4. Expansion

Alternatively, you can use the funds as working capital in your expansion plans such as when opening a new branch, hiring more people, and relocating offices.

 

How to Apply

Eligibility criteria

Your business or company must be ACRA registered and physically present in Singapore. Also, at least 30% local equity of the company must be held directly or indirectly by Singapore citizens or permanent residents.

Requirements

You have to provide the following details in your application:

  1. Company information such as paid-up capital and percentage of revenue
  2. List of corporate shareholders
  3. Previous financial performance and projections
  4. Amount of financing required

Steps to apply

  1. Complete the Enterprise Financing Scheme (EFS) e-form
  2. Submit the EFS e-form with the necessary supporting documents to the participating financial institution you chose
  3. Submit supporting documents including:
    • ACRA search of the business entity
    • ACRA search of the shareholders
    • Previous year’s financial statements
    • Other credit criteria set by the participating financial institutions

 

How Likely Will Your TBLP Application Be Approved?

Since the launch of the Temporary Bridging Loan Programme, the success rate of the loan applications is over 90%. It is important to remember though that the credit criteria set by the different banks must be met in order to be approved. Not every loan application is successful. 

To learn more about the TLBP, you can visit the Enterprise Singapore website here. Enterprise Singapore is a Singapore government agency website so all the information you read is official. Updates can be read on the website

In some cases, loan applications are not approved because the business owners cannot provide the necessary documents. This failure to get approval does not mean the end of the world for these business owners. There are alternative sources of funds with great loan deals and terms.

 

What if Your Company Is Not Eligible for the Temporary Bridging Loan Programme?

So, what if your business or company is not eligible for the Temporary Bridging Loan Programme? You should not worry because there are alternative financial institutions that can bring your business account capital. Private banks and licensed moneylenders offer business term loans and working capital loans to support businesses at a time like this.

While a temporary bridging loan has the ideal business term loan, those who cannot get approval can still seek other options. Banks and moneylenders now offer business support loans with low interest rates. You can go to your trusted moneylender and inquire about the maximum amount of their working capital loans to have an idea.

 

Takeaways

  • TBLP lets you borrow up to S$3 million with up to 5% interest rate per year payable within 5 years.
  • This type of loan will help you with emergency expenses or short term needs that may not be covered by your current finances 
  • The advantage of applying for this type of loan is that the interest rates are much lower than traditional loans and it’s also easier to get approved as well

 

Final Word

With the advent of technology, it’s never been easier for people to get loans in Singapore. If you need a loan but can’t wait weeks or months on end, we have an easy solution! Request for loan quotes from Loan Advisor and receive quotes from different licensed lenders instantly!

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