COVID-19: UOB extends $4b in loans to mid-sized firms under scheme

Article originally posted on The Straits Times.

United Overseas Bank (UOB) has approved $4 billion in loans to mid-sized firms under the Temporary Bridging Loan Programme, it said yesterday.

The loans are going to clients in sectors that have been hit hard by the Covid-19 pandemic, including construction, retail and hospitality.

Banks here have provided help to small and medium-sized enterprises (SMEs) in various ways, including deferment of some interest payments.

They have also tapped a Monetary Authority of Singapore facility for Enterprise Singapore loans that lends at an interest rate of 0.1 per cent.

The Government is taking a 90 per cent risk share on loan schemes overseen by Enterprise Singapore, such as the Temporary Bridging Loan Programme and the SME Working Capital Loan, for applications initiated between April 8 this year and March 31 next year.

UOB noted that the $4 billion of loans were extended to mid-sized firms from April 8 to April 30.

The application process has been digitalised so customers can get the funds in about a week.

"As the Covid-19 pandemic continues to affect businesses' day-to-day operations, many mid-sized firms are finding themselves at a critical juncture," said Mr Eric Tham, UOB's head of group commercial banking.

"These firms tend to have hundreds of employees and high overhead fixed costs, making it imperative for them to access additional liquidity quickly."

Meanwhile, OCBC Bank said the volume of applications from mid-sized firms for relief measures has surged by more than 10 times over the past two months.

Mr Linus Goh, its head of global commercial banking, said: "While they may not have financial difficulties now, these firms have taken up these loans to conserve liquidity in anticipation of a protracted recovery.

"Compared with small businesses, where the need for funding support is more urgent, the mid-sized firms tend to have stronger balance sheets and access to more financial resources."

DBS Bank's group head of SME banking, Ms Joyce Tee, said it is focusing on support for micro and small enterprises, which typically have fewer working capital financing options.

It has made government-assisted loans available to around 3,000 corporate customers, of which about 65 per cent are micro and small enterprises.

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UPDATED AS OF 16 Jan 2021
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