United Overseas Bank (UOB) announced on 5 May that it has already approved S$4 billion in loans under the Temporary Bridging Loan Programme (TBLP) since the government increased its risk-share of such loans to 90 per cent a month ago.
The loans were extended to the Bank’s mid-sized enterprise clients in sectors which have been hard hit by the COVID-19 pandemic including construction, consumer staples, retail and hospitality. Firms in many sectors have been required to stop activities and have been affected by the drop in overall consumption as people stay home during the “circuit breaker” period.
To help its clients access much-needed funding at lower interest rates, UOB has also tapped the Monetary Authority of Singapore (MAS) SGD Facility for Enterprise Singapore (ESG) Loans (the Facility). UOB is passing on the funding cost savings in full to its clients.
Mr Eric Tham, Head of Group Commercial Banking, UOB, said, “As the COVID-19 pandemic continues to affect businesses’ day-to-day operations, many mid-sized firms are finding themselves at a critical juncture. These firms tend to have hundreds of employees and high overhead fixed costs, making it imperative for them to access additional liquidity quickly.
“Since the start of the COVID-19 pandemic, we have been helping SMEs overcome the shock to their business. We have helped our clients overcome their immediate liquidity challenges by providing loan moratoria and allowing them to repay loan interest only,” he continued.
“Through our close collaboration with the MAS and ESG, we have helped clients access funding under the government-assisted schemes quickly and at much lower interest rates than before the pandemic. We hope that through the tripartite effort between MAS, ESG and UOB, we will be able to help these companies tide over the pandemic and plan for the eventual return to more normal operating conditions,” he concluded.
Digital application process facilitates distribution
To ensure that funds can be disbursed as quickly as possible, UOB has also digitalised the entire loan application process for clients to receive their funds in about a week.
A client that has worked with UOB to tap the TBLP is Consort Bunkers Pte Ltd, a bunkering supplier and logistics and barging services provider. In addition to the challenges faced by the industry from a slowdown in global trade volume, the company’s operations have also been disrupted by the “circuit breaker” measures.
Mr S.K. Yeo, Managing Director and Founder, Consort Bunkers Pte Ltd, said, “This period has been particularly trying for us as we face the twin challenges of COVID-19 and a weak sentiment perpetuated by the fall in oil prices. In order to ride out this storm, we need to ensure that we have sufficient working capital to run our business smoothly.” He welcomed the government’s support measures and UOB’s help in securing it quickly.
In addition to helping its clients tap funding under the government-assisted schemes, the Bank also announced S$3 billion in relief assistance for those affected by COVID-19. The measures include allowing affected businesses to rework their principal repayments and to service only their loan interest for up to one year and offering financing liquidity against mortgage security.