Covid-19: MAS and financial industry further extend support measures for SMEs in Tier 1 and 2 sectors and individuals, ESG further extends support measures

8 July 2021

The Monetary Authority of Singapore (“MAS”), the Association of Banks in Singapore (ABS) and the Finance Houses Association of Singapore (FHAS) have announced on 24 June 2021 an extension of the existing industry-wide support measures for individuals and small and medium-sized enterprises (“SMEs”) in Tier 1 and 2 sectors that continue to face financial difficulties due to the Covid-19 pandemic.

Enterprise Singapore (“ESG”) has also announced, on 5 July 2021, that it will extend two of its financial support measures.

By way of background, in October 2020, MAS introduced measures such as the Extended Support Scheme - Standardised (“ESS-S”) to help SMEs that continued to face cashflow difficulties due to the pandemic transition gradually to full loan repayments. Under the ESS-S, SMEs in Tier 1 and 2 sectors, as determined under the Jobs Support Scheme (“JSS”), could opt for partial deferment of principal payments on certain secured loans. The Extended Support Scheme - Customised (“ESS-C”) was also introduced to facilitate the restructuring of a borrower’s loans across multiple financial institutions to allow for better restructuring outcomes. The application period for the ESS-S and ESS-C was due to expire on 30 June 2021. MAS states that this is expected to be the final extension of the industry-wide support measures.

ESG announced on 5 July 2021 that it will extend the Temporary Bridging Loan Programme (“TBLP”) and the enhanced Enterprise Financing Scheme - Trade Loan (“EFS-TL”) for another six months from 1 October 2021 to 31 March 2022. In October 2020, ESG had extended both schemes for six months from 1 April 2021 to 30 September 2021.

More information about these measures can be found in our article titled “Covid-19: MAS and financial industry extend loan repayment support for SMEs and individuals, ESG extends grants and financial support measures”.

The following is a summary of the extended support measures announced by MAS and ESG.

Extension of support measures for SMEs

Ease cashflow for Tier 1 and 2 SMEs that have sustained recent revenue impact

The application window for the ESS-S has been extended from 30 June 2021 to 30 September 2021 for eligible SMEs in Tier 1 and 2 sectors.

SMEs in Tier 1 and 2 sectors that are currently participating in the ESS-S may opt to defer 80% of principal payments on their secured loans granted by banks or finance companies, as well as loans granted under ESG’s Enhanced Working Capital Loan Scheme and TBLP for an extended period till 30 September 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 principal payments till 30 September 2021.

Under the JSS, Tier 1 and 2 sectors include aviation and aerospace, tourism, hospitality, conventions and exhibitions, built environment, licensed food shops and food stalls, qualifying retail outlets, arts and entertainment, land transport, and marine and offshore. 

The ESS-S is available on an opt-in basis to borrowers who 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.

Facilitate restructuring of SMEs’ loans

The application window for the ESS-C has been extended from 30 June 2021 to 31 December 2021.

An SME with more than one lender may approach any of its lenders to assess if it would benefit from a multi-lender restructuring programme under the ESS-C.

The ESS-C is available for SMEs with more than one lender for whom other restructuring programmes, such as the Simplified Insolvency Programme and Sole Proprietors & Partnerships Scheme, may not be suitable.

Extension of ESG financial support measures

ESG is extending the following measures for another six months from 1 October 2021 to 31 March 2022.

• TBLP: This is supported by the concurrent extension of the MAS SGD Facility for ESG Loans. Under the extension, the Government’s risk-share on the loan remains at 70%, with the maximum loan quantum set at S$3 million.
• EFS-TL: Under the extension, the Government’s risk-share on the loan remains at 70%, with the maximum loan quantum set at S$10 million.

Extension of support measures for individuals

The application window for the following support measures for individuals who have sustained recent income/employment impact has been extended from 30 June 2021 to 30 September 2021:

• Property loans: Reduced instalment repayment plans pegged at 60% of borrowers’ monthly instalment until 31 December 2021. A loan tenure extension of up to three 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 five years.
• Renovation and student loans: Extend loan tenures by up to three years.

These extended measures are available on an opt-in basis for borrowers who can provide proof of income impact and with loan repayments that are not more than 90 days past due.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg and ESG website www.esg.gov.sg:

• MAS media release: MAS and financial industry further extend support measures for individuals and SMEs in Tier 1 and 2 sectors 
• Annex A - Extension of support measures for individuals
  
• Annex B - Extension of support measures for SMEs
  
• Infographics: Extended credit support measures for individuals and SMEs 
• ESG media release: Financing support measures for enterprises extended to support continuity of cashflow and trade activities for business recovery

 

Further information

Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains knowhow and materials on legal and regulatory aspects of the Covid-19 crisis.

In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.