Most SMBs are confident of meeting their loan repayment obligations: survey, bank news and top stories

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Seven out of ten small and medium-sized enterprises (SMEs) affected by the pandemic are confident of meeting repayment obligations on government-backed loans over the next year without affecting their business operations, a survey found.

DBS Bank’s survey included nearly 250 SMEs in three sectors hardest hit by Covid-19 – retail, food and beverage, and construction and construction.

The bank conducted the survey early last month after the Monetary Authority of Singapore announced expanded loan relief facilities for SMEs to partially defer principal repayments on secured loans and Enterprise Singapore loans.

Overall, around three quarters of SME owners stated that they continued to be “optimistic” and “determined”. However, they also recognized the toll the outbreak has taken, with one in five saying they were “exhausted” from dealing with the ongoing economic fallout.

Joyce Tee, Head of SME Banking at DBS Group, noted that while the survey shows that SMEs are wounded, it “certainly not counted”. “In fact, many SMEs are quietly preparing for a recovery, and even those in the hardest-hit sectors have been busy reinventing themselves and transforming their business models,” she said.

Almost 30 percent of the SMEs surveyed were willing to forego expansion plans in order to meet their debts and downsize their business activities in order to make their repayments.

Only 3 percent said they are not confident about making their loan repayments over the next year and may need to close their stores.

The survey also found that SMEs in all three sectors identified working capital as a top priority in overcoming the economic downturn. 65 percent of respondents said this factor is key to managing overhead costs.

As of early March, DBS has approved nearly 9,700 loans totaling over $ 5 billion to SMEs under the Temporary Bridging Loan and Extended Working Capital Loan, as well as other support initiatives.

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