An Intro to Temporary Bridging Loan Programme
Would you like to improve your cash flow by getting short-term financing? Introducing the Temporary Bridging Loan Programme (TBLP)- a short-term funding solution that provides immediate cash flow to businesses in need.
The TBLP is a fast-approval bridging loan that can help your business access the capital it needs to meet its obligations. It provides working capital to businesses and is available to tourism businesses and other enterprises from April 1, 2020, to March 31, 2021. These companies can borrow up to $5 million at a 5% interest rate.
In October 2020, the government announced that it was extending the deadline for applications for the TBLP program from April 1, 2021, to September 30, 2021. However, the maximum loan amount would be lowered to S$3 million for all applications made during this time period. Businesses can apply for a TBLP at participating financial institutions like Singapore’s big banks. No collateral is required for the loan. TBLPs can be repaid over five years.
From April 1, 2021, to September 30, 2021, the government will assume a 70% risk share for loan applications. A reduction of 70% will be applied to loan applications submitted between April 1 2021, and September 30 2021.
TBLP Entry Requirements & Eligibility Criteria
TBLP applicants must be ACRA-registered businesses. The types of businesses that are eligible for TBLP are:
As a business registered with ACRA, the company should have at least 30% equity held by a Singaporean or Permanent Resident to be eligible for the TBLP scheme. The business must also have a physical presence in Singapore.
Documents needed for TBLP
If you are interested in applying for the TBLP, fill out the Enterprise Financing Scheme (EFS) form and submit it to a participating financial institution.
The form must include the following:
- Information about your company
- Paid-up capital
- Percentage of its income from selling goods or services.
- Names of shareholders and corporate parents
- Financial history and plans.
- Loan details and the amount required
- Your business entity’s latest ACRA search.
- Recent ACRA search of corporate shareholders (if over 50% of the shares are held by corporate shareholders)
- Financial statements for the past year.
- Invoice for assets.
- Other documents specified by the financial institution
Also Read: Business Line of Credit Helps SMEs. How
8 Ways Temporary Bridging Loans Help Businesses
Acquiring a TBLP helps businesses handle:
1. Immediate Costs
Bridging loans can help you cover immediate costs, like equipment repairs. The TBLP may help you replace this equipment if you haven’t saved it.
2. Cash-flow issues
The TBLP gives businesses the money they need to pay for payroll, rent, marketing, utilities, stock, and other urgent business costs.
3. Business expansion
Temporary bridging loans can fund company growth. This includes moving offices and buying new equipment. Bridging loans give a business the money it needs to grow until it can get long-term financing.
4. Interim funding
While your business waits for long-term financing, bridge loans can also help cover business expenses and resolve any cash flow issues in the meantime.
5. Salary payments
Salaries weren’t a goal before the pandemic; they were a pressing business need. Retaining employees still remains essential as we adapt to a new normal and reorganize business models to allocate capital more effectively. There are a few ways to keep your employees while also conserving cash. One option is to use a temporary bridge loan. This will help you cover your costs while you wait for longer-term financing options.
6. Business upgradation
Implementing regular cleaning practices is vital to protect everyone in the workplace. It would be best if you changed some of your habits and practices to keep your employees and customers safe. This includes changing the way your space is arranged.
7. Rental expenses
Although most of your employees may work from home, you may still need office space, so you have to pay rent. Maintaining a good balance between utility bills and rent, electricity, and internet connection are essential to the success of your business.
8. Digital expenses
Digitalization can help your business stay ahead of the curve. This means investing in data analysis, online payments, and customer shopping. Saving money and time helps company productivity. Having an emergency fund can protect your business from sudden changes in the market.
Having an emergency fund to serve as a safety net is important for small and medium-sized businesses. The market will undergo changes in the near future, and you will need to be proactive and well-prepared. The TBLP can help you build an emergency fund that will cushion possible challenges your business may face. Short-term bridging loans can help cushion any unexpected financial blows by providing the money you need to cover urgent expenses.
We hope this quick guide will help you understand the essentials of acquiring TBLPs to fund your business.
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