*Updated as we receive more information from our partner financiers
Disclaimer: This article is based on information that Lendingpot has received informally from partners. Interest rate information is usually not published on banks' websites. All the information is believed to be accurate; however, no claims, promises or guarantees about the accuracy, completeness or adequacy of the information are made. All information, commentary, recommendations or statements of opinion provided in this article are for general information purposes only. We do not claim to be authoritative. If there are any errors in our reporting, please contact ask@lendingpot.sg for rectification.
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.
Government-backed Business Loans - Interest Rate Table
*All rates displayed are effective interest rates (EIRs).
| Banks | EFS-WCL (Before Budget 2020) | EFS-WCL(After Budget 2020) | TBLP(After Budget 2020) | Notes |
|---|---|---|---|---|
| DBS | 6 – 9% | 3.75% | 2.5% |
|
| UOB | 6.5 – 7% | 3.75% |
2.5% |
|
| OCBC | 6 – 8.88% | 3% |
1.5% (1 or 2 year tenor) 2.5% (3 to 5 year tenor) |
|
| CIMB | 6 – 9% | 3.75% | 3% |
|
| RHB | 7.5 – 9.5% | 5.5 - 6.5% | Max 5% |
|
| Standard Chartered | 6.5 – 8% | 4.25 - 7.5% | 3.75 - 4.25% |
|
Legend:
TBLP = Temporary Bridging Loan Programme
EFS-WCL = Enterprise Financing Scheme - Working Capital Loan
All rates displayed are Effective Interest Rates (EIRs)
Last updated on 11th May 2020
This is great news for SMEs!
Some of the interest rates of these loans have been lowered by half!
This will not only be useful for struggling SMEs that are trying to obtain cash flow to survive this downturn, but is also a great opportunity for better-positioned SMEs to obtain affordable capital for expansion opportunities for the eventual economic recovery from the COVID-19 pandemic.
This is in addition to other initiatives already announced for SMEs in Singapore, such as higher government-backed business loan limits (announced in the supplementary budget on 26th March) and that SMEs can defer their principal payments for property loans (announced by MAS on 31st March).
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