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Credit Counselling Singapore to extend help to owners of failed or failing small firms

CREDIT Counselling Singapore (CCS) is extending its services beyond consumers to owners of failing or failed small enterprises, it announced on Thursday.

It has launched a pilot Enterprise Credit Counselling Programme to help entrepreneurs who are burdened with debts after their businesses have closed or are on the verge of ceasing operations.

Under the new programme, CCS will provide credit counselling to these owners, helping them to manage their liabilities to multiple creditors. It will also facilitate a comprehensive and coordinated approach for those who are able to repay within a reasonable period and draw up a repayment proposal.

Calling the move timely, CCS chairman Kuo How Nam said: “In our credit counselling programme for consumers, we have come across many instances where individuals have used their personal credit facilities to finance their business operations. Many have also given personal guarantees and when their business fails, their personal assets are affected. These entrepreneurs often do not have access to professional help and they may also be afraid to approach their creditors for fear that it may trigger early recalls of their loan facilities.”

He also noted that it is very difficult for a small enterprise to deal with its creditors, especially when they are not just banks but finance companies and other licensed lending entities whose security arrangements may be different or more complicated.

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Said Mr Kuo: “Our experience has shown that a coordinated and comprehensive solution involving all creditors will usually produce better outcomes for both creditors and borrowers. CCS will act as a facilitator for small enterprise owners who have terminated their operations. The goal is to help them avoid bankruptcy while optimising repayments to creditors.”

To qualify for CCS help, owners must have terminated their businesses or are on the verge of doing so, and have business assets not exceeding S$1 million and total business debts of not more than S$500,000.

They should also attend a group talk that provides information on topics including personal guarantees, and joint and several liabilities. Those who still need help after the talk will be counselled on specific needs such as closing down procedures, how to ascertain liabilities and manage debts for a fuller picture of the leftover liabilities of their enterprises, and their unsecured consumer debts.

Small and medium-sized enterprises (SMEs) in Singapore have been finding it harder to pay their bankers. Statistics from the Monetary Authority of Singapore revealed that the non-performing loans ratio for SMEs rose from below 2 per cent in the first half of 2014 to 3.5 per cent in same period last year. Half of new small enterprises fail in their first three years, according to the Department of Statistics.

On CCS's decision to focus on owners who have shut down or are shutting down their businesses, Mr Kuo said: “We are not going to try to save enterprises that are in trouble as we do not have the resources or expertise to broker a deal with various stakeholders involved in a rescue mission.

"However, we can try to minimise the impact of a business failure on entrepreneurs, by hopefully, helping them to avoidbankruptcy if all their creditors can agree on a structured repayment proposal put up by CCS."

Small enterprise owners who are interested in CCS's programme can register for and attend its upcoming talks on debt management for small enterprise owners.  The talks are scheduled for Nov 8 at 7pm, Nov 22 at 3.30pm and Dec 13 at 7pm. Interested parties can register for the talk at or call 6225 5227 (6-CALL-CCS).

Since it began providing credit counselling in 2004, CCS has counselled more than 27,000 consumers and submitted more than 18,000 debt repayment proposals as of last month.

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