By Francis Chan

SMALLER firms put off by excessive paperwork when applying for government-backed loans can now get more help.

Spring Singapore yesterday launched the Financial Facilitator Programme (FFP), which aims to help businesses overcome challenges when applying for the enhanced government financing schemes.

As part of a broad measure to help local businesses cope with the credit crunch, the Government has made available to them a suite of business financing schemes at attractive rates.

Interest rates on the various government-backed loans have been cut by 1.25percentage points to 5per cent.

The Government will also pay 90per cent of insurance premiums for loans made to small and medium-sized enterprises (SMEs).

Despite the aid, a common complaint among SME bosses has been the onerous loans application process at banks.

This can entail completing a loan application form that runs to 70 pages long and which contains jargon that ordinary people have trouble comprehending.

At the end of it, some are rejected by the banks over incomplete paperwork, the gripe goes.

But from today, SMEs applying for the financing schemes can approach Enterprise Development Centres (EDCs) and the EnterpriseOne Business Information Services (EBIS) for help before submitting their applications to the banks.

They will help an SME evaluate its financial health, and will provide advice on financial management, as well as helping entrepreneurs consider other financing options aside from direct loans.

One key benefit of this latest initiative is that SMEs can get much-needed assistance with filling in loan application forms.

Spring says it was told by banks that SMEs here often experienced problems during the application process, and were sometimes unable to present their case adequately.

'There is often a gap between the SMEs' expectations and the requirements of the banks. We are thus very pleased to see the industry stepping up to fill this gap,' said Spring chief executive Png Cheong Boon.

As part of the new programme, Spring will provide financial support to the six business centres in engaging financial advisers to advise SMEs on financing strategies and loan applications.

The Straits Times understands these financial advisers have extensive experience in the financial sector, specifically in the areas of business and enterprise banking.

SMEs will be able to tap on the expertise of these advisers to better understand what lenders require in loan applications and how to better present their business plans to the banks.

Under the FFP, the services provided by these experts will be free for all firms.

EBIS is run by the Singapore Business Federation, while the Association of Small and Medium Enterprises (Asme) and Singapore Manufacturers Federation (SMa) each operate an EDC.

The remaining three other EDCs are managed individually by ethnic-based business chambers like the Singapore Chinese Chamber of Commerce and Industry (SCCCI), the Singapore Malay Chamber of Commerce and Industry (SMCCI), and the Singapore Indian Chamber of Commerce and Industry (SICCI).

With the support of Spring, the EDCs have been providing a wide range of expert business consultancy products and services to both aspiring entrepreneurs and existing businesses here since 2005.

Spring provides up to 70per cent of the establishment costs of each EDC - capped at $1.5million - as part of the Government's overall plan to reach out to local SMEs.

Mr Png say the EDCs and the EBIS are well-poised to help SMEs.

'Having been specially set up to help SMEs in Singapore, the EDCs and EBIS are in a position to better understand and facilitate the financing needs of SMEs,' said Mr Png.

Business community leaders have welcomed the Government's latest move to help local firms during the crisis.

'The FFP is a timely initiative in the wake of the economic downturn, as it aims to help viable SMEs access financing more effectively...' said SCCCI vice-president Patrick Lee.

'We hope to work with them to put a convincing case to the banks that they are worth supporting.'

Echoing Mr Lee's views, the SMCCI said the FFP would expand the scope of assistance it could offer through its EDC.

'This initiative is an excellent example of how EDCs can use their unique position in the community to further help SMEs in Singapore, especially during challenging times,' said Mr Mohamad Akbar, SMCCI vice-president.

This article was first published in The Straits Times on January 12, 2009.