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As Singapore’s economy continues to reel from the impact of Covid-19, a lifeline for companies in the worst-hit business sectors is starting to dry up.
Despite a government pledge to backstop bridging loans – credit extended to companies to tide them over during difficult periods – companies in ailing industries such as aviation and construction are finding it harder to get funds.
While such loans were disbursed more freely earlier in the year amid strong government support and a low-interest-rate environment, banks have tightened the purse strings in recent months as the pandemic drags on.
Loan brokers, which help companies secure credit from banks, have noted a stark contrast in loan approvals during Singapore’s circuit breaker (or lockdown) in April and May, and after.
Lenny Lim, executive director of loan broker Beacon Financial Services, said the lockdown was, in fact, the “best period” to get loans, with clients in sectors such as construction, tourism and events seeing an approval rate of more than 90 per cent.
But after the circuit breaker, the approval rate in these industries fell to between 20 and 55 per cent.
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