UOB Offers Liquidity Boost to SMEs
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Businesses that require urgent access to funding to stay afloat during the Covid-19 outbreak can take up pre-approved loans of up to S$200,000 ($140,000) and only service the interest until December 31.
UOB has announced collateral-free loans to help small and medium enterprises, especially those from hard-hit sectors such as retail and food and beverage, gain access to much-needed funds quickly.
According to a statement on Tuesday, this will be offered to customers with a good repayment track record and at least a 12-month borrowing relationship with the bank, and the funds will be available in two business days.
UOB said that as a result of the Covid-19 outbreak, it has seen more customers who are seeking loans to provide their businesses with liquidity, citing a threefold increase in loan approvals from January to March this year.
The reality is that small businesses already operate on tight cash flow and do not have the liquidity to withstand the prolonged economic shock that is expected from the Covid-19 pandemic. As such, they require urgent access to funding in order to stay afloat, said Lawrence Loh, head of group business banking, UOB.
Questions & Answers
Q.What is the maximum amount an SME can borrow through these pre-approved loans?
What is the maximum amount an SME can borrow through these pre-approved loans?
Businesses can access pre-approved loans of up to S$200,000, which is equivalent to $140,000. These funds are intended to help them manage liquidity during the Covid-19 outbreak and keep their operations going.
Q.What are the main eligibility criteria for SMEs to access these loans?
What are the main eligibility criteria for SMEs to access these loans?
To qualify, customers must have a good repayment track record and an existing borrowing relationship with UOB that spans at least 12 months. This ensures the bank is lending to established clients.
Q.When do businesses need to start repaying the principal amount of these loans?
When do businesses need to start repaying the principal amount of these loans?
Borrowing businesses are only required to service the interest on these loans until December 31. This deferment provides immediate relief, allowing them to conserve cash during the difficult period.
Q.How quickly can eligible businesses expect to receive the loan funds?
How quickly can eligible businesses expect to receive the loan funds?
Once approved, the funds will be made available to eligible businesses within two business days. This rapid turnaround addresses the urgent need for liquidity among small and medium enterprises.