DBS floats SORA-pegged business property loan for SMEs
SME business property owners can borrow up to 80% of their property value.
DBS has launched Singapore’s first business property mortgage loan that references the Singapore Overnight Rate Average (SORA), according to a press release.
The SORA-pegged Business Property Loan covers all property loan types, DBS said. It is specifically tailored for small and medium enterprises (SMEs) looking to finance their commercial and industrial properties.
SME business property owners can borrow up to 80% of their property value and choose to stretch their repayment tenor to up to 25 years.
Interest rates on the SORA-pegged Business Property Loan will be based on the 3-Month Compounded SORA published by the Monetary Authority of Singapore (MAS), as well as an applicable margin.
Joyce Tee, Group Head of SME Banking at DBS, noted that whilst demand for new business property purchases has dropped, they have observed a sustained interest amongst SMEs for property refinancing solutions amid the challenging economic outlook.
“With the industry moving towards a phased discontinuation of SIBOR and adoption of SORA, we are now giving business property owners the option of taking up a SORA-pegged package ahead of time to save them the hassle of repapering their loans down the road,” Tee said.
The loan is available beginning 3 September.