Backs to the wall, Singapore's SMEs see a saviour in alternative financiers

Peer-to-peer funding platforms and balance sheet lenders are seeing a surge in demand for financing from SMEs. They’re plugging the gaps left by local banks, which haven’t favoured small businesses before

After Covid-19 struck, over 8,600 businesses shut in Singapore in April, more than double the number in March

The Singapore government and local banks are trying their best to support SMEs, but it isn’t going to be enough

Alternative financiers like Funding Societies, Validus Capital, and Finaxar, have stepped in to fill this gap, offering short-tenure loans and invoice financing

These platforms are now poised to not just fund more SMEs, but also decide which ones survive and thrive post-Covid

Singapore’s small and medium-sized enterprises (SMEs) are bearing the brunt of the Covid-19 pandemic-induced downturn. As many as 8,663 businesses closed closed The Business Times Over 8,500 business entities close shop in April; highest in recent years Read more in April this year, double the number in March. The number of new businesses formed in April—3,767—was also the lowest since 2013. SMEs are vital to the Singaporean economy, making up 99% of Singapore’s businesses.

For these beleaguered businesses, which often live from invoice to invoice, access to working capital is now critical, as The Ken has reported reported The Ken The Covid-19 inflection point for Singapore's SMEs Read more previously.

AUTHOR

Benjamin Cher

Based in Singapore, Ben covers news and stories from the hub of Southeast Asia. He covers the intersection of technology and business, and how it affects Singapore and Southeast Asia. Ben was previously a reporter at The Edge Singapore.

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