MAS, along with the Association of Banks in Singapore (ABS) and the Finance Houses Association of Singapore (FHAS), announced the final extension of the existing industry-wide support measures for the individuals and small and medium-size enterprises (SMEs) in tier 1 and 2 sectors that continue to face financial difficulties due to the pandemic. Borrowers that are unlikely to be able to resume full loan installment repayments by the end of the relief period should approach their lenders early to work out longer-term repayment solutions. After the industry-wide support measures expire, lenders will continue to offer relief and restructuring options for borrowers facing cashflow challenges based on their specific circumstances. Borrowers that are able to resume full loan repayments should do so immediately to avoid unnecessary debt accumulation.
Extension of Support Measures for SMEs
The application window for the Extended Support Scheme—Customized (ESS-C) will be extended from June 30, 2021 to December 31, 2021. For ESS-C Scheme, SMEs with more than one lender may approach any of their lenders to assess if they would benefit from a multi-lender restructuring program; all SMEs with multiple creditors that do not qualify for other restructuring programs, such as the Simplified Insolvency Program and Sole Proprietors & Partnerships Scheme, are eligible. Additionally, the application window for the Extended Support Scheme—Standardized (ESS-S) will be extended from June 30, 2021 to September 30, 2021 for eligible SMEs in tier 1 and 2 sectors. SMEs in tier 1 and 2 sectors that are participating in the ESS-S may choose to defer 80% of the principal payments on the secured loans granted by banks or finance companies as well as on loans granted under Enterprise Singapore’s Enhanced Working Capital Loan Scheme and Temporary Bridging Loan Program for an extended period till September 30, 2021. SMEs in tier 1 and 2 sectors that have not participated in the ESS-S can also apply to their lenders to defer 80% of the principal payments till September 30, 2021. With respect to ESS-S, the following eligibility criteria has been stipulated:
- Opt-in basis for borrowers that do not have loan repayments that are more than 30 days past due
- Borrowers whose loans are already granted partial principal moratorium, should not have overdue payments on those loans.
Extension of Support Measures for Individuals
For extended support measures for individuals, the eligibility is on opt-in basis for borrowers that can provide proof of income impact and have loan repayments of not more than 90 days past due. For this, the application window for the following support measures will be extended from June 30, 2021 to September 30, 2021:
- Property Loans. Reduced installment repayment plans pegged at 60% of the borrowers’ monthly instalment until December 31, 2021; a loan tenure extension of up to 3 years can also be discussed with lenders
- Unsecured Revolving Credit Facilities. Convert outstanding balances to term loans at a reduced interest rate
- Debt Consolidation Plans. Extend loan tenures by up to 5 years
- Renovation and Student Loans. Extend loan tenures by up to 3 years
Keywords: Asia Pacific, Singapore, Banking, COVID-19, SMEs, Credit Risk, Loan Moratorium, Loan Repayment, Property Loans, Credit Facilities, MAS
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