Private sector steps up support for struggling businesses
Private companies are offering assistance to local businesses as they deal with the impact of the COVID-19 pandemic
Since the COVID-19 outbreak made its presence felt in Singapore at the start of the year, the Government has rolled out three support packages totalling over S$60 billion to help businesses and workers tide over this challenging period.
Yet, it is not only the public sector that has stepped up to help local firms cope with the economic downturn. Financial institutions and private companies here are also extending a helping hand to struggling businesses through various business activities and dedicated support measures with the aim to provide cashflow relief and access to funding.
Here are just three examples of companies who are doing their bit to give local enterprises a leg up during this crisis.
DBS: Cashflow relief and digitalisation support
Since February, DBS has rolled out a series of measures to help businesses meet both their immediate and longer-term needs.
Recognising that having consistent cashflow is the top worry among SMEs, the bank is providing a six-month principal repayment moratorium for secured term loans. It is also offering an extension of import facilities of up to 60 days for businesses coping with disruptions due to COVID-19.
Other measures include a collateral-free Digital Business Loan of up to S$50,000, which will be disbursed within 24 hours of loan acceptance, and a digital relief package to help F&B operators move their operations online.
“Both the short-term financing relief packages and the longer-term digital adoption plans that are being made available to clients now will help businesses with their immediate cashflow needs and their longer-term digital transformation efforts, which should continue even in the face of economic headwinds,” said Tan Su Shan, Group Head of Institutional Banking, DBS.
Razer: Financial assistance for firms
Gaming giant Razer launched a US$50 million COVID-19 support fund in April that will be dispensed in the form of financial contributions, cashflow support and investments. Razer’s investment arm, zVentures, will seek to invest between US$100,000 and US$1 million per investment in businesses with technologies dedicated to fighting COVID-19 or supporting people through the pandemic. These include firms in the autonomous F&B, delivery and logistics, and healthcare sectors.
Meanwhile, the company’s business-to-business payment service, Razer Merchant Services, is waiving one year of annual fees for both online and offline merchants in Southeast Asia, with zero sign-up fees, and giving each participating merchant US$10,000 in marketing funds.
“There are many growing implications with COVID-19 on the global economy and it is affecting everyone from all walks of life. We see the best way for us to do our part is to support our business partners, starting with our ecosystem,” said Min-Liang Tan, Co-Founder and CEO, Razer.
In a separate initiative, Razer and the Singapore FinTech Association announced that it will provide fintech companies in Singapore bridge financing, equity or equity-linked instruments ranging from US$100,000 to US$1.5 million.
Funding Societies: Access to alternative funding
It’s not just large corporates that are chipping in. Through its digital financing platform, Singapore-based start-up Funding Societies is helping businesses who might not qualify for traditional bank financing get access to alternative sources of funding. The company connects SMEs looking for short-term financing with individual and institutional investors searching for fixed-income or private debt investments.
“The lack of short-term financing for SMEs is a structural problem in most economies, and the situation is exacerbated during a crisis like the COVID-19 outbreak. Similarly, most investment options require a high financial commitment, long lock-up periods or significant time to study and monitor. As a two-sided platform, we aim to enable financial inclusion by serving both parties’ needs and hopefully make our society a better place in our own small way,” said Kelvin Teo, Co-Founder and Group CEO, Funding Societies.
The company funds loans as small as S$5,000 up to S$1.5 million, while investors can begin investing through the platform for as little as S$20.