Government Support: More Grants and Loan Support for SMEs 2020

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Oct 13, 2020

The Covid-19 pandemic has acted as a catalyst for businesses in Singapore to rethink their business strategies. Be it to pivot their business model or to transform and go digital, businesses today are increasingly seeking to increase productivity or even looking to expand overseas.

Singapore Government’s support schemes are not only aiming at providing relief for this current crisis, it also wants to help businesses transform, get ready for the post-pandemic world and adapt to the new normal. Most importantly, we need to learn to future-proof our business.

Trade and Industry Minister Chan Chun Sing announced several enhancements made to the various support schemes for Small and Medium Enterprises (SMEs) and will be available for up to an additional nine months:

Market Readiness Assistance (MRA) Grant

Firms looking to expand their businesses abroad will have 80% of qualifying costs covered, instead of the current 70%, from 1st November 2020 to 30th September 2021.

This international boost supports SMEs up to S$100,000 per company per new market whereby the applicant company has not exceeded S$100,000 in overseas sales in the last three preceding years. MRA grant covers overseas market promotion (capped at S$20,000), overseas business development (capped at S$50,000) and overseas market set-up (capped at S$30,000).

The MRA grant will also be enhanced to cover participation in virtual trade fairs. This will enable companies to seek overseas opportunities through such platforms, especially with the acceleration of growth of online shopping.

Enterprise Development Grant (EDG)

The Enterprise Development Grant helps to offset qualifying costs for projects that help businesses grow and transform through adoption of technology and innovative processes.

Companies looking at upgrading their businesses, or exploring new areas of growth by tapping on automation and technologies can receive higher support of up to 80% until 30th September 2021, after which it will revert to up to 70%.

Productivity Solutions Grant (PSG)

The Productivity Solutions Grant supports companies in the adoption of pre-scoped IT solutions and equipment that enhances productivity and business processes.

It covers sector-specific solutions including the retail, food, logistics, precision engineering, construction and landscaping industries. Other than sector-specific solutions, PSG also supports adoption of solutions that cut across industries, such as in areas of customer management, data analytics, financial management and inventory tracking.

The higher support of up to 80% will be extended till 30th September 2021, and revert to up to 70% thereafter.

Temporary Bridging Loan Programme

The Temporary Bridging Loan Programme provides business financing support to SMEs in all sectors to have access to working capital to tide through this crisis. Currently, SMEs can apply up to S$5 million business loans under the Temporary Bridging Loan Programme, with enhanced financing support from the Government to provide risk-sharing to 90% for loans initiated from 8th April 2020 to 31st March 2021. Interest rates are capped at 5% per year.

This will be extended for another six months to help SMEs manage their immediate cash flow needs. Companies can apply for loans up to S$3 million, with up to 70% risk-sharing by the Government until 30th September 2021.

Read also: 8 Common Questions SMEs Have About The Temporary Bridging Loan Programme 2020

Enterprise Financing Scheme (EFS) - Project Loan

This scheme originally aims to finance firms for the fulfilment of secured overseas projects, with loans of up to S$50 million and 50% risk-sharing by the Government. The supportable loan types include Working Capital Loan, Factory / Building / Land, Equipment / Machineries / Vessels / Other fixed assets / Machinery Hire Purchase and Guarantees.

It has since been enhanced to support domestic construction projects undertaken by companies in the construction sector starting from 1st January 2021 to 31st March 2022. Construction companies can take loans of up to S$30 million for secured domestic projects, with at least 50% risk-sharing by the Government.

Enterprise Financing Scheme (EFS) - Trade Loan

EFS Trade Loan covers trade financing for SMEs’ domestic and overseas transactions such as inventory / stock financing, overseas working capital, as well as for short-term import, export and guarantee needs.

The maximum loan quantum under the enhanced EFS Trade Loan has been raised from S$5 million to S$10 million, and risk-share was also increased to 90% for new applications initiated from 8th April 2020 to 31st March 2021.

The scheme has been extended by another six months from 1st April 2021 to 31st September 2021 with a lowered risk-sharing of 70% from the Government, and the maximum loan quantum remains at S$10 million.

Other grants that SMEs can take advantage of are the various hiring initiatives that the Government has in place for hiring local employees. SMEs can also send their employees for training courses to meet the changing business landscape and to reskill or upskill when required.

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