MAS and the financial industry offer support to SMEs (Tier1& 2 sectors) and individuals by extending the deadline for full loan repayments.
To help the SMEs in Tier 1 and 2 sectors and individuals, The Monetary Authority of Singapore (MAS), together with the Association of Banks in Singapore (ABS), and Finance Houses Association of Singapore (FHAS), announced the ‘final extension’ of the deadline for full loan repayments. Introduced in 2020, this measure aims to help individuals and businesses who are affected by the pandemic.
The extension aims to support those who continue to experience difficulty in this time of the pandemic.
The application window to reduce instalment repayment plan for property loans has a new deadline – 30 September 2021. It also converts outstanding balances to term loans interest rates, extends loan tenures by up to 5 years for debt consolidation plan, extends the loan tenures by up to 3 years for renovation and student loans. Initially, the deadline was 30 June 2021.
The same deadline extension applies for eligible SMEs in Tier 1 and Tier 2 sectors under the Extended Support Scheme – Standardised (ESS-S).
The SMEs in Tier 1 and 2 sectors that are currently taking part in the ESS-S program have the choice to defer the 80% of principal payments on their secured loans granted by banks or finance companies. Also, those loans granted under Enterprise Singapore’s (ESG) Enhanced Working Capital Loan Scheme and Temporary Bridging Loan Programme are part of the extension.
In addition, SMEs in Tier 1 and Tier 2 that are not under ESS-S can also apply on their respective lender to defer 80%o of principal payments. The application window for Extended Support Scheme – Customised (ESS-C) is also part of the extension.
Those borrowers with multiple lenders can approach any of their lenders to assess if you can get benefit from a multi-lender restructuring program.
The Eligibility Criteria
For individual borrowers, they must provide proof of the income impact of having loan repayments that are over 90 days past due. On the other hand, SMEs must not have loan repayments that are more than 30 days past due. Also, borrowers under partial principal moratorium grants must not have overdue payments.
SMEs with multiple creditors must not qualify for other restructuring programmes.
To date, 30 September 2021 is the final extension of the industry-wide support measure. MAS advises that those borrowers who are unlikely to meet the full loan repayment after the extension must approach their lenders as early as possible.
Mr Ravi Menon, Managing Director of MAS said, “The industry-wide support measures introduced by MAS and the financial industry last year have helped borrowers affected by COVID-19 restrictions. This final extension will provide support for remaining borrowers still affected by the restrictions. With continued economic recovery and transition to an endemic COVID-19 situation, loan repayments must start normalising so as to minimise debt accumulation. We must pivot away from industry-wide credit reliefs to more selective support measures tailored to individual borrowers’ circumstances.”