SINGAPORE: In a challenging economic landscape, a number of local small businesses and start-ups are reportedly finding themselves on the brink of bankruptcy as loan interest rates continue to soar.

This alarming trend has raised concerns among various chambers of commerce, which asserted to Channel 8 news that the loans available to their members no longer offer the favourable terms they once did. The Chinese daily reported that nearly half of small businesses are encountering severe difficulties in repaying their loans.

A spokesperson for the non-profit organization Action Community for Entrepreneurship (ACE) told Channel 8 news that the current macroeconomic environment, characterized by rising interest rates and an economic recession, has cast a cloud of uncertainty over the future.

The representative pointed out that as a risk asset, venture capital has experienced a concerning decline in transaction volume year after year. Industry studies further corroborate this grim picture, revealing that the total transaction volume in the first half of this year plummeted by over 50 per cent compared to the previous year. This decline in venture capital activity exacerbates the financial strain on struggling businesses.

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To navigate this uncertain terrain, organizations like ACE stress that industry players must undertake a comprehensive reevaluation of their business models and cost structures. The survival of these businesses hinges on their ability to adapt to the prevailing crisis.

In response to these pressing concerns, ACE has stepped in to provide guidance to struggling companies. Their focus is on helping businesses conserve cash and identify new development opportunities in the ever-evolving economic landscape.

With the local business ecosystem facing unprecedented challenges, the road ahead remains uncertain. The efforts of organizations like ACE and the resilience of small businesses will be pivotal in determining whether they can weather this storm and emerge stronger on the other side./TISG

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