Most Essential Choices for the Temporary Bridging Loan

Minister for Finance Lawrence Wong announced an extension of the Temporary Bridging Loan (TBL) program for another six months, till September 30, 2022, during the presentation of the Singapore Budget 2022. As an explanation, he cited the firms’ immediate cash flow problems as prices jump due to rising inflation.

In what ways does the Temporary Bridging Loan Program work?

As of March 2020, a government-backed credit program called Temporary Bridging Lending will be available to help businesses get through the COVID-19 transition period. As a consequence of this decision, businesses are confident and clear that they will be able to get low-cost working capital to aid them with their cash flow issues.

When may a firm expect to get a short-term loan from a financial institution?

With a Temporary Bridging Loan, you may be sure that your application will be quickly processed. You may apply for a job online using your Singpass or Corppass with little documentation and without waiting for clearance.

Even if you don’t currently have a cash flow problem, you may want to consider taking out a Temporary Bridging Loan because of these five reasons.

Doing so will raise your credit rating

Temporary Bridging Loans are available to even businesses that are not presently experiencing cash flow issues, as suggested by the article’s title. As a small or medium-sized business (SME) that has never taken out a bank loan before, it is especially crucial to prove your creditworthiness. Temporary Bridging Loan Program is available to all corporate sectors, not only those in the most dire financial straits, making this conceivable.

company incorporation

However, banks may not have all the information they need to decide whether or not your firm is a qualifying borrower, even if it currently has a steady cash flow. For whatever reason, if you need a bank loan, you should be aware that you may be treated as a lower-quality borrower. As a consequence, they will either refuse to give you the money you need or charge you a higher interest rate.

As long as you pay back your Temporary Bridging Loan on time, you show banks that you are a responsible borrower who is entitled to better terms and lower interest rates if you ever need money again.

Understand the Steps Required to Apply for a Bank Loan

Many start-up companies have never had to rely on a bank for financing. As a general rule, it is discouraged to try anything new unless it is very essential to your success. Now that you know what to expect when applying for a bank loan down the road, you’ll be more prepared when the time comes.

Temporary bridge loans have a low interest rate

A maximum of 5% of the loan amount may be charged in interest on a Temporary Bridging Loan. Eligible businesses, especially those that can demonstrate a history of timely repayments, may be eligible for even reduced interest rates. The government will not share in the project’s risk under typical circumstances. Therefore, interest rates will rise dramatically. As a result, this is a great opportunity to get low-interest financing.

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