VIRUS OUTBREAK

Many merchants, hawkers may not survive another 4-6 weeks of closure

Merchants' association makes five recommendations to help ailing sector

Singapore

MANY heartland merchants and hawkers may not survive another four to six weeks of closure even with government aid, warned the Federation of Merchants' Associations, Singapore (FMAS), prompting it to make five recommendations to help the ailing sector on Friday.

The recommendations come in the wake of a survey conducted by FMAS, which represents more than 20,000 heartland merchants and hawkers licensed by the National Environmental Agency (NEA) and its subsidiary, the Heartland Enterprise Centre Singapore (HECS).

FMAS President Yeo Hiang Meng shared over a Zoom conference call that almost all the respondents said they were expecting dismal business volumes as Singapore's circuit breaker to stem out the Covid-19 spread kicked into Day 46 as of Friday.

They feared that the government's phased approach to allow most businesses including food and beverage (F&B) dine-in services, retail outlets as well as tuition and enrichment centres to reopen only in Phase 2 may be the straw that breaks the camel's back.

While the association "strongly supports" maintaining all social safety distancing and preventive measures to reduce the chances of the second or third wave of Covid-19 outbreak, it is asking the government to consider allowing merchants and hawkers to resume operations sooner, rather than later.

"We would like to recommend closing the gap between Phase 1 and Phase 2 from 4-6 weeks to two weeks if the daily local Covid-19 community infection continues to hover in the region of five and below after June 2," Mr Yeo said.

Retail shops and all F&B outlets have incurred huge losses for the last two months and would like to be back in operation soonest to stay afloat.

"We are very concerned if any prolonged period of circuit period extension will snowball into more undesirable damaging effects," he said.

Equally critical, banks should speed up their processing of loan applications and dispense loans quickly as many businesses are facing a cash flow crunch and require immediate liquidity. Already, 20-30 per cent of these merchants said they are unable to pay their rent.

"We do understand that while banks are likely to be functioning on split teams during the circuit breaker period, hence it will slow down the overall process," Mr Yeo said.

FMAS adviser Kwek Theng Swee elaborated that while the Covid-19 (Temporary Measures) Act 2020 offers temporary relief for the next six to 12 months to certain contracting parties who are unable to meet their contractual obligations amidst the severe business disruption inflicted by the pandemic, the tenants must eventually pay the rent which has been accrued.

While the government has announced a one-year temporary bridging loan programme for businesses, co-sharing up to 90 per cent of the borrowing risk, and businesses may request for deferment of principal repayment for one year, the processing of loan applications has been slow.

"It is said to take one to three weeks for approval. But many have applied one to two months ago and up to now, still haven't got any response from the banks," Mr Kwek said, adding that banks' due diligence and compliance checks remain very strict.

"If banks can release the funds faster, it certainly will help. Two-three months, the business may not be around anymore," he said.

FMAS also recommended further extension of property tax, commercial rental rebates, Job Support Scheme and the waiver of foreign workers' levy.

It has proposed that S$500 vouchers be distributed to all Singaporean households "to encourage consumers to continue consuming goods and services in the HDB neighbourhood, town centres and hawkers centres in Singapore".

FMAS also hopes that all town councils will waive the Temporary Occupation Licence (TOL) fee for outdoor display area, outdoor refreshment area and overhead signages for April to June, and consider a 50 per cent rebate from July to December 2020.

So far, it is understood that HDB has given a full rental rebate for F&B coffee shops' outdoor designated area for April and May 2020.

"We believe that no matter what government assistance schemes are, some companies and enterprises will still be winding up after the crisis. This is a natural cycle," Mr Yeo said.

"We hope that with the concerted efforts from the government, fitter companies in the private sector can weather through the turbulent situation and emerge to become more influential companies in the future," he added.