Lianhe Zaobao - 悉看大势：中小企业融资渠道窄 银行说不别心慌 私募信贷来续命 (June 2025)

With traditional bank loans often out of reach for many small and medium-sized enterprises (SMEs), businesses are left in a lurch and limited in their options of alternative funding. Earlier this year during Budget, Singapore has stepped up in its response, announcing a S$1 billion Private Credit Growth Fund to providing more financing options for high-growth local enterprises.

Aidan said, "The launch of this fund demonstrates Singapore's determination to develop a private credit ecosystem, which will promote trading opportunities, attract more institutional participation, stimulate financial innovation, and further develop our country into a regional private credit hub."

However, while considering private credit as an alternative financing option, he cautioned that businesses should ensure they have a clear understanding of the lender, loan terms, and associated costs. Otherwise, the added pressure of high interest rates could strain the company’s cash flow and repayment capacity.

"It is worth noting that private credit has extremely poor liquidity, unlike stocks and bonds that can be easily transferred through the secondary market, which makes it difficult for fund managers to cash out," he concluded.

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