- September 1, 2020
- Posted by: avantconsulting
- Category: SME Loans
SME Loan for Singapore Construction & Engineering Business – According to Singstat, the Singapore Construction sector makes up 3.7% of the nominal GDP of Singapore.
This is a big industry that affects many sectors in Singapore. Many people are employed in this sector and it also affects many other related business such as services as well as materials.
The Singapore Construction sector is badly affected by the Covid-19 pandemic outbreak. Most businesses have to stop work during the circuit breaker period and because of the outbreak in the dormitories, many businesses are currently still unable to restart their operations because their foreign workers are all stuck in the dormitories.
Financially it is very tough for such businesses to keep going with zero income but consistent need to pay salaries to locals and foreigners.
For those that are hiring many foreign workers, construction companies are still required to pay them their monthly salary plus lodging while waiting for them to be cleared to leave the dormitories.
Few things to take note for SME Loan for Singapore Construction & Engineering Business are the following:
1. Construction sector is deemed high risk
The Construction sector in Singapore is facing one of its toughest challenges right now. Not just the economy is doing badly, most construction firms are not able to start work because the dormitories for their foreign workers are locked down so that the virus can be contained.
The Construction sector in Singapore has in recent months seen high default rates and therefore many banks are cutting back on loaning money to such businesses to ensure they do not tip over their risk alarms.
High risk sectors means for the next couple of months it will be tough to try for a few main banks in Singapore.
2. Payments are likely to be way slower than usual
With the whole industry slowing down drastically due to manpower shortages, the whole industry will likely see major cash flow issues.
Payments that used to be 30 day credit terms will see even longer credit payments and this will affect the cash flow of the industry as a whole.
For most business that require to pay salary and overheads, this will be a double whammy that will cause many likely bankruptcies.
With this in mind, many banks will likely avoid lending to this sector until things get better economically.
3. More businesses are likely to transit to being more cash based
With cash strapped everywhere in the sector, we will likely see more cash based business.
You either pay cash for a big discount, or you pay cash before work is done.
For businesses that have been through down turns before, this is wise, because you might end up losing money when you customers end up not being able to pay.
Cash requirements will be high if you want to continue your projects to keep things moving!
This is where our company comes into place.
Our consultants will speak to you to work out a plan on how you can get access to more funds if you urgently need it and also to build up your financial positions so that when certain financial institutions open up their requirements you have a better chance at going longer.
There are some banks and financial institutions that are still available for the construction and engineering sector, so you should consider taking some loans for standby first before things tighten up completely.
We hope you enjoy our article on “SME Loan for Singapore Construction & Engineering Business”.
Avant Consulting is a leading SME Loan Company in Singapore, we are working closely with customers in the construction sector to help them acquire the loans that can help them to pull through this tough period of the pandemic.
We have worked with businesses from many sectors and have build a strong platform of connections with potential financiers not just banks.
If you are facing tough issues, there are still avenues available for you, speak to us so that we can advice you on what your options are.
If you are someone who needs help, speak to us now!
Thank you for reading our article on “SME Loan for Singapore Construction & Engineering Business”.