*Updated as we receive more information from our partner financiers
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In response to the government’s call for financial institutions in Singapore to provide urgent assistance to companies, several local and foreign banks in Singapore have lowered their effective interest rates for government-backed business loans.
The rates will be effective from 1st April 2020 and will apply to the Temporary Bridging Loan Programme (TBLP) and the Enhanced Enterprise Financing Scheme – Working Capital Loan (EFS-WCL) offered by Enterprise Singapore’s partner financing institutions (PFIs).
(Updated 6th April 2020)
Under the Solidarity Budget announced on 6th April 2020, the government announced that banks and finance companies may apply for low-cost funding through a new Monetary Authority of Singapore (MAS) Singapore Dollar facility, for new loans granted under the EFS-WCL and TBLP.
Lowering the cost of funds will lower the interest rate costs of new government-backed loans issued through the PFIs.
(Updated 20th April 2020)
On 20th April 2020, the MAS and Enterprise Singapore (ESG) announced that the new facility will lend Singapore dollars at 0.1% interest per annum to eligible financial institutions.
PFIs are expected to pass on the cost savings to SMEs, lowering the cost of the government-backed EFS-WCL and TBLP.
This is the main reason that we’ve seen new government-backed loans offered at these low interest rates from the start of April.
*All rates displayed are effective interest rates (EIRs).
Eric Koh is passionate about helping SMEs grow and has spent years interacting with business owners at OCBC and IFS Capital. He is interested in 70s rock ‘n roll, the odd novel and copious amounts of historical trivia.