LOCAL banks will receive support to pilot loan solutions for small and medium-sized enterprise (SME) merchants looking to expand their business or address any unplanned cash flow needs, announced payment services group Network for Electronic Transfers (Nets).

Payment-related data for participating SME merchants is available from Nets to local banks, allowing the loan applications to be more efficient and timely, said Nets in a press statement on Thursday (Mar 31).

Approval time can also be shortened while allowing banks to have more insight to offer relevant financing solutions to the SME merchants, it added.

Currently the initiative by Nets is in its pilot phase, where the data and feedback gathered from participating merchants will be used to gauge the market responses in regard to loan solutions. It will also be used to refine the loan-related products offered by local banks.

When officially launched, Nets will work on enabling payments with participating banks - where a part of the SME merchants' daily takings will be used to pay for the loan instalments via Nets' point-of-sales terminals.

This automation will reduce administrative time, leaving the SMEs with more time to run their business, Nets noted.

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"The financing solution aims to provide flexible repayment plans and quick approvals to support these small business owners. A shorter approval process means that SMEs can tap on this business funding at a moment's notice, allowing for more flexible and agile business decisions," Nets added.

Lawrence Chan, group chief executive of Nets, said that Nets has the privilege of a relevant and significant share of most merchants' digital payments, and this allows it to provide insights to help identify merchant needs and potentially speed up the underwriting process.

"We are constantly looking at how we can provide merchants with solutions and tools to adapt and thrive in today's business climate," Chan added.

Merchants can find out more about this financing solution through participating banks.

DBS is 1 of the local banks participating in the pilot phase. 

Joyce Tee, group Head of SME Banking at DBS, said that SMEs today need to become nimbler and to stay ahead in the rapidly changing business climate - so the financing solutions banks provide must become equally flexible and responsive.

"Our collaboration with NETS to explore tailored working capital packages to suit each businesses’ unique financial situation builds on DBS’ earlier experience of tapping into data to offer hyperpersonalised banking solutions for our customers. DBS will work with NETS to analyse the industry’s response and feedback during the pilot to further enhance our suite of financing solutions for SMEs,” Tee added. 

Read more: 

• Nets goes digital to stay relevant

• Nets makes 2 board appointments from OCBC