By SIOW LI SEN

If you're a small firm and nervous about approaching a bank for your first loan, don't worry. DBS Bank wants you.

Emboldened by the 80-90 per cent government guarantee, banks have been going all out to extend loans to small and medium-sized enterprises (SME) amid Singapore's worst recession.

While bankers say existing customers are their top priority, new loan applicants are also welcome.

DBS says it has gone one step further - it practises a no-discrimination policy where customers are not asked about previous loan rejections.

Edwin Khoo, DBS head of enterprise banking, said that between Dec 1, 2008, and April 30, 2009, DBS is the leader in terms of the number of government loans approved.

DBS ranks No 1 for both micro loans of up to $100,000 and the larger bridging loans of up to $5 million, said a DBS spokeswoman. Over the December to April period, DBS made over 1,000 loans amounting to several hundreds of millions of dollars, she added.

These loans were extended to companies across different sectors of the economy, and included both listed companies and SMEs, said Mr Khoo.

'We also extended the most micro-loans in the industry, as we made a conscious effort to stand by smaller businesses, which have fewer financing options, and for whom credit can make a huge difference between success and failure.'

While DBS' priority is to support existing customers, it has extended government loans to new customers, Mr Khoo said.

'In fact, we give all loan applications a fresh look, and do not discriminate against businesses that may have had their loan applications rejected by other banks,' he added.

Standard Chartered Bank says its government-backed loans have grown almost four times since December 2008, though it is unclear if the increase refers to the number or value of the loans.

According to Kavita Bedi, Stanchart general manager for SME banking, its SME loan size ranges from $140,000 to $700,000.

'We welcome all new bank customers and existing customers to speak to us about their financing needs. For instance, an average of 80 per cent of all small business loans under LEFS are taken up by new customers, said Ms Bedi.

LEFS, or the Local Enterprise Finance Scheme, offers loans of up to $15 million.

Latest official data shows that the number of government-backed loans in April stood at 1,834, with a total value of $1.06 billion. Since December, there has been 4,684 loans with a total value of $2.5 billion, exceeding the total loan value over the last two years: S$1.03 billion in 2008 and S$682 million in 2007.

More than 90 per cent of the loans have gone to SMEs, with close to 70 per cent going to smaller businesses with less than $5 million in annual sales turnover.

OCBC Bank says it has approved several hundred million dollars' worth of government-backed loans to SMEs, with quantums ranging between $20,000 and $5 million.

Said Linus Goh, OCBC global head of enterprise banking: 'Our existing customers indeed remain our priority, but we also continue to engage and acquire new customers even in this economic downturn.'

Maybank Singapore says it has doubled its loan portfolio under the government-backed schemes since December, with 80 per cent of the customers being new business.

In all, it has disbursed nearly 300 loans with an average loan size of $1 million, Maybank said.

Lee Hong Khim, Maybank Singapore's head of business banking, said: 'We plan to expand our government-backed loans portfolio two-fold by 2010.'

For HSBC Singapore, the number of loans extended to SMEs under the government scheme has more than tripled, says its head of commercial banking Tan Siew Meng.

Citi Singapore's head of commercial markets Tan Chia Seng said the bank saw a 35 per cent jump in loans to SMEs in the first quarter over the previous quarter.

Perhaps about the only bank not on the bandwagon is United Overseas Bank, whose focus remains its existing customers.

Says its head of commercial banking Yeo Eng Cheong: 'Any loan application from new customers will be reviewed and subject to the bank's robust credit approval process.'

This article was first published in The Business Times.