Government Grants: What Are They and Why do SMEs Need Them?
Small and medium-sized businesses in Singapore receive many government grants and funding. The grants help businesses to start, expand, or improve their operations. The government offers a wide range of grants to suit the needs of companies.
Businesses can apply for grants through the relevant government websites. The application process is straightforward, and the government reviews the applications before notifying them if the grant has been approved.
Grants are a valuable resource for businesses in Singapore because they help businesses grow and compete in the global economy. The government is committed to helping SMEs succeed and grow.
Some Government Grants for SMEs in Singapore
Grants are financial aids provided by the Singapore government to businesses to improve their skills, productivity, and competitiveness. These grants can be in cash, equity financing, business loans, or tax incentives. Some of the best grants for small and medium-sized businesses are the ones that improve skills and productivity. Let us take a look at some of the most relevant government grants.
Enterprise Development Grant
The Enterprise Development Grant (EDG) helps companies innovate, improve, and expand their businesses abroad. The EDG can help companies in many ways, such as strengthening their business foundations, expanding business efficiency, and increasing global market access.
The Singapore Economic Development Board offers the Entrepreneurship Development Grant to help businesses in the city-state finance their projects. To be eligible for the grant, companies must be registered and operating in Singapore, have at least 30% local ownership and have enough money to start and finish the project. The grant covers up to 70% of business project costs, including software, equipment, labour, and third-party consulting.
Productivity Solutions Grant
The PSG helps businesses improve productivity and processes with IT solutions and equipment, including sector-specific solutions. This grant can provide up to 70% of the cost of a solution, making it an excellent option for businesses looking to improve their operations in the following companies.
- Food.
- Retail.
- Logistics.
- Precision engineering.
- Construction
- Landscaping
Small and medium-sized businesses registered and operating in Singapore with at least 30% Singaporean business are eligible for PSG. To qualify for the grant, IT solutions and equipment must be used in Singapore.
Market Readiness Assistance Grant
Small businesses looking to expand can apply for the Market Readiness Assistance Grant. This grant will help cover up to 70% of the costs associated with setting up a business in a new market, finding partners and customers overseas, and advertising in foreign markets. This can be an excellent way for small businesses to expand their reach and grow their business.
To qualify for an MRA grant, a business must be registered in Singapore, have at least 30% Singaporean ownership, and not have more than 200 employees or 100 million Singapore dollars in annual sales.
PACT (Improved) Grant
The PACT improved multinational-local and medium-sized enterprise partnerships. “The PACT” covers all business collaborations since April 1, 2018. SME businesses can now collaborate on new ideas, growth, and funding. A lead enterprise will lead PACT projects that benefit all partner companies. These projects include improving technology, skills, alliances and consortiums to share services and resources. PACT funds SMEs up to 70% and non-SMEs up to 50%.
Any business wishing to become a Lead Enterprise in the PACT company must be registered as a local or multinational company in Singapore. PACT accepts foreign and local businesses, but local projects are prioritized.
Venture Debt Programme
The Venture Debt Programme (VDP) helps high-growth SMEs get funding. It provides loans of up to $5 million to help businesses grow in working capital, assets, projects, mergers and acquisitions. This program benefits small and medium-sized enterprises (SMEs) in Singapore that want to grow but may not have the money to do so.
You may be eligible for a government loan if you’re an SME in Singapore. The government offers these loans to help SMEs compete, succeed, and grow. To qualify, your SME must be registered and operating in Singapore, have at least 30% of its shares owned by Singaporeans, and make less than 100 million Singapore dollars or employ more than 200 people.
Takeaway
Singapore is considered as one of the best places in the world for business. SME owners can thus tap on the above mentioned grants to boost their capabilities, enhance productivity, increase their competitiveness as well as to expand businesses:
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