Applying for SME Grants in Singapore are a great way to save costs and fund your business. This article details the different grants you can apply for.
Moreover, Singapore fosters growth among many small to medium enterprises (SMEs). Thanks to the proactive approach of the Singapore government in helping them. Despite the tight competition in the global market, SMEs can keep up. In this article, we will take a closer look at SMEs and the role of SME grants in their success.
Singapore has shown great interest in the growth and expansion of SMEs since the 1980s. It started implementing a targeted SME Policy after a recession. It enforced the policy further during and after the Asian Financial Crisis. Due to its prudent policies, especially on trade and semi-adjustable exchange rates, it was able to cope with the crisis and rescue small businesses.
After the crisis, it used a service delivery approach to SME policies, which provided services to empower SMEs and keep up with the competition. It focused on increasing SME productivity and the potential to go international. Also, it had priority sectors to spur growth and prepare for macroeconomic changes. In 2007, it ranked fourth out of 122 countries in capital and market access for SMEs. Hence, it is no surprise that many emerging countries have adopted similar SME policies.
In 2007–2009, Singapore felt the impact of the Global Financial Crisis. It was easy to understand the origin of the crisis since it relied on US consumption. Because of this, the country’s GDP per capita fell from $40,007 to $38,926. Despite this, it regained its footing and saved many small and medium-scale businesses. SME grants in Singapore helped the business sector weather the stormy market environment.
In 2009, Singapore ranked first in SMEs’ ease of doing business. It ranked second in economic freedom, fourth in putting up a business, and fifth in global competitiveness. Singapore’s business sector continued to flourish over the past decade, and its GDP per capita bounced back in 2010 and broke $60,000 in recent years.
Indeed, it has maintained its robust economy. It is one of the many reasons businesses continue to thrive regardless of size. Even so, it continues to face challenges in spurring growth among SMEs, although it continues to find solutions to suffice business needs. Here are some opportunities and challenges for Singapore SMEs.
Although many businesses are going online, digitalisation remains a problem for SMEs, and it is more visible for companies that use traditional processes and manual systems. Despite this, the Singapore government helps small businesses adapt to the trend. It allotted a large portion of the national budget for SME innovation and growth in recent years. Technology remained one of its top priorities to help different sectors.
In line with this, the Singapore government grants for SMEs funded the SMEs Go Digital program. This platform would subsidise about 70% of the cost of cyber security and Artificial Technology (AI) tools. SMEs would have access to digital solutions and training for business growth. Also, they could access loans for technology projects like large-scale automation. This year, this digital platform has already helped about 4,000 SMEs.
Even Singapore was not exempt from the unfavourable impact of the pandemic. Given the health protocols, most outdoor activities were limited. It has led to business shutdowns and a drop in economic activities. Its GDP in 2020 decreased to $470 million, lower than the average of 2016–2019 GDP.
Studies earlier this year showed that over 40% of entrepreneurs planned to shut down. Some business owners did not have any concrete plans on the survey day. It was due to the uncertainty that the pandemic brought upon Singapore. In times of economic uncertainty, businesses need more help from the government.
But, the majority of business owners remained optimistic about their recovery and growth. Many businesses now are shifting focus to e-commerce, possible because most people are on the internet. Many customers buy from online stores and do online transactions. Also, smaller businesses can use the situation as an avenue for digital innovation.
Also, recovery is on its way as GDP in the first half has already bounced back. As estimated, it may increase to $508 million, higher than the pre-pandemic value with the continued government support for digitalisation. Cashless transactions are one of the things they can do to scale up and adapt to this trend. They may even do automation to streamline their workflow and different transactions.
Singapore remains one of the top countries in the Asia Pacific for SMEs. Aside from its robust economic growth, it has a favourable tax climate. Moreover, its government is taking a proactive approach to stimulating SME growth. Here are some of the SME grants in Singapore and government subsidies.
SMEs are one of the key pillars of the Singapore economy, comprising 48% of its GDP. Given this, their productivity is crucial in maintaining robust economic growth. Since the early 2000s, the government has focused on SME productivity and globalisation. One of its popular SME assistance grants is the Productivity Solutions Grant (PSG).
The PSG helps SMEs adapt to IT solutions to automate business processes. It provides IT solutions to industries like food, logistics, engineering, and retail. It also helps them with customer management and data analytics. For better resource tracking, it provides solutions for financial and inventory management.
PSG solutions are already pre-scoped by different government agencies, including the National Environment Agency and Enterprise Singapore. Hence, these solutions are already tried and tested. As of now, the government provides a maximum support level of 80%.
For further details, SMEs can check the GoBusiness Government Assistance website. But before applying, they must review their needs first to choose the appropriate support packages for them. SMEs can apply for PSG under the following criteria:
The Business Improvement Fund (BIF) supports technology adoption and innovation. It aims to redesign SMEs’ business models and automate processes. With this platform, SMEs’ productivity and competitiveness will increase. But unlike the PSG, the BIF focuses on tourism and improves the following core capabilities:
If qualified for this program, they can receive Singapore grants for SME. But the funding support is subject to evaluation of the scope and merits of the project. Keep in mind that SMEs must have at least 30% local shareholding. It must have operating revenues below S$100 million or employees below 200.
The pandemic has led businesses and consumers to go online. Most business activities, such as marketing and payment, are done online. In the advent of the Internet of Things (IoT) era, digitalisation helps to keep up with the fast-paced environment. In Singapore, the government aims to support the digitalisation of SMEs.
Through the Digital Resilience Bonus (DRB), the digital capabilities of SMEs will increase. It focuses on the food services and retail industries since these industries are affected by the pandemic and post-pandemic requirements. Given the safety measures, physical distancing affects their production and revenues.
The DRB aims to enhance digitalisation under the SMEs Go Digital program. Now, SMEs in the priority industries have PayNow Corporate accounts. They have digital solutions for more efficient working capital management and receive $10,000 in payouts.
SMEs will receive an international boost with Market Readiness Assistance (MRA). Since globalisation is a government priority, this MRA grant aims to take businesses overseas. Eligible companies may apply through the Business Grants Portal under the following criteria:
If qualified, SMEs will have the following support:
Note that the government does not accept retrospective applications. Below are conditions that fall under retrospective applications:
The SkillsFuture Enterprise Credit (SFEC) targets employers. It entices employers to invest in enterprise transformation and capability development. Qualifying for this grant means getting S$10,000 credit. This amount will cover 90% of program-related expenses. To apply for this, employers must meet the following criteria:
| How SMEs Can Improve the Chances of a Successful Application | ||
| Tip 1 | Small and medium enterprises (SMEs) must ensure the accuracy of the information they provide. | |
| Tip 2 | They must ensure that they fit the criteria for the grant. | |
| Tip 3 | They may ask questions and seek advice from the grant owners. | |
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SMEs are one of the primary growth drivers for the Singaporean economy. Given this, the government does its best to provide the financial support that SMEs need.
To be approved in the SME grants listed above, business owners must ensure that they have prepared the required documents, such as financial statements, to apply.
Thankfully, Spenmo is here to support business owners in streamlining the end-to-end payments and reconciliation process. That way, you can close your books 80% faster month-on-month and monitor spending activity almost instantly. Talk to us about Spenmo today!
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