Government-assisted bridging loans for SMEs to be extended until March 31, 2022
THE government is extending its loan assistance programmes for small- and medium-sized enterprises (SMEs) for another six months, until March 31, 2022, Finance Minister Lawrence Wong said on Monday.
The Temporary Bridging Loan Programme and the Enhanced Enterprise Financing Scheme - Trade Loan will be extended beyond Oct 1 this year.
In a ministerial statement on support measures for the Heightened Alert period, Mr Wong said access to credit remains a critical lifeline for many SMEs even though economic conditions have improved.
He noted that the government has supported over S$22 billion worth of loans to over 25,000 enterprises through Enterprise Singapore's financing schemes since the start of 2020, with 99 per cent of the recipients being SMEs.
"I encourage businesses to make use of this extension and other available schemes to ready themselves for the new normal," Mr Wong said.
"Many of our SMEs have already seized the opportunity to build new capabilities and future-proof their business."
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The parameters for both schemes remain the same, with the government continuing to take on 70 per cent of the risk-share.
The Monetary Authority of Singapore (MAS) will also extend the MAS Singapore Dollar Facility for Enterprise Singapore Loans accordingly, he said.
Mr Wong said the government recognises that SMEs are concerned with business costs such as rental, labour and utilities, and that they may face bigger challenges in a crisis.
The government has therefore designed its interventions to benefit them the most, he said.
"For example, about two-thirds of the S$26.7 billion of (Jobs Support Scheme funds) paid out to-date went to SMEs. About 90 per cent of the benefits from the Corporate Income Tax rebate in the Year of Assessment 2020 went to SMEs."
He also said SMEs can continue to enjoy low taxes, as the global movement to change corporate tax rules only applies to a select group of global companies.
Although 95 per cent of active companies in Singapore are SMEs, they contribute less than a third of Singapore's corporate income tax revenue. More than half of these companies pay no corporate tax.
As for individuals, Mr Wong said the government uses a progressive system of transfers that provides more help for those in greater need.
For example, the bottom 20 per cent of households by income receive around S$4 of benefits for every dollar of tax they contribute.
He noted that Singapore's overall income tax revenue - both corporate and personal - is 6 per cent of GDP. The average for members of the Organisation for Economic Co-operation and Development is 12 per cent.
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