SINGAPOREAN property tycoon John Lim’s family office, JL Family Office, ARA Asset Management and Straits Trading Company have set up a S$5 million fund to extend short-term loans to businesses in Singapore amid the virus outbreak.
By doing so, they aim to “lend a helping hand to viable Singapore companies who may face short-term cash-flow problems as a result of the outbreak”, said ARA group CEO John Lim to media on Wednesday.
Chew Gek Khim, executive chairman of Straits Trading, also noted that there are already efforts to help the community and medical workers, but “not much is being done to help businesses”.
“We’re looking at people who have good businesses, and whose businesses are disrupted,” Ms Chew said.
And this mechanism of support is fast and practical, as opposed to handing out grants or funds with no terms, she added, in response to The Business Times‘ queries.
Mr Lim also made it clear that the fund is only meant to help businesses: “We’re not investing in a business, we’re actually doing a help fund.”
Starting Feb 15, local small and medium-sized enterprises (SMEs) will be able to apply for loans of up to S$50,000 for up to a period of six months, through online crowdfunding platform Minterest.
The interest rate will be pegged at 0.5 per cent per month – an “attractive” rate compared to industry rates of 7 to 18 per cent, according to Mr Lim.
There will also be a 2 per cent processing fee charged by Minterest to cover loan administrative expenses, although the fee is half of what it usually charges.
Applications can be approved as quickly as within 48 hours upon receipt of all completed documents.
To be eligible, the companies must be GST (goods and services tax) registered and be majority-owned by Singaporeans and/or Singapore permanent residents. They must also have been in operation for the past 12 months.
Face-to-face meetings will also be conducted with borrowers to determine if their capital needs are genuine, Mr Lim said.
The article was contributed by Business Times.