Plugging the financing gap with alternative fundings to keep SMEs in business

WITH SMEs making up 99 per cent of Singapore's enterprises, they are a significant factor in the nation's overall economy. It is therefore extremely concerning that over 81 per cent of these businesses feel they are unlikely to grow. With so many enterprises concerned about their future, and some considering reducing their workforces or shutting up shop, immediate, rapid changes must occur to shore up the economy and protect SMEs before the picture becomes even bleaker.

Even before the Covid-19 health crisis, obtaining funding through traditional lenders and banks was challenging for many small and medium-sized enterprises. Now, with the added pressures of economic fluctuations and an uncertain future, this has become an almost impossible task for those seeking financial assistance. With a slowdown in many sectors, and consumers reducing their spending due to their own financial insecurities, the struggle to secure working capital or ease cash flow issues has become all too real for many SMEs.

Over half of SMEs surveyed in Singapore have had to turn to governmental agencies and relief programmes to ease their woes to counterbalance this lack of funding access. However, this is not a sustainable business model in the longer term, and more stable financial options are necessary for firms to continue to operate, thrive, and grow.