Explaining Government Grants for SMEs
In its 2018 budget, Singapore's government introduced three grants to help growing businesses. These grants combine existing grants to streamline the entire process for businesses. SMEs that require funding to grow should consider the Productivity Solutions Grant, Enterprise Development Grant and PACT scheme, which will provide businesses with funding to modernize, expand and partner with other businesses.
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Productivity Solutions Grant
The Productivity Solutions Grant (PSG) is designed to give SMEs the financial capability to adopt new technologies and productivity solutions. Beginning in April 2018, the PSG program will organize existing grants to provide a seamless process for small businesses.
Through the PSG, businesses can apply for grants covering up to 70% of costs for qualifying technologies or productivity solutions. The Ministry of Trade and Industry's (MTI) Committee of Supply (COS) will be administering these grants, which will be accessible to SMEs through the Business Grants Portal. SMEs seeking to modernize and upgrade their operations should contact MTI for more details to determine if they are eligible for this grant program.
Enterprise Development Grant
The Enterprise Development Grant (EDG) combines International Enterprise Singapore's Global Company Partnership (GCP) Grant and SPRING Singapore's Capability Development Grant (CDG) to allow businesses to develop, grow and expand internationally. These grants will cover up to 70% of the costs of qualifying activities and are offered through Enterprise Singapore (ESG). These grants are ideal for larger SMEs that have plans to grow their business overseas.
The PACT Scheme was developed to facilitate collaboration between businesses of all sizes. The program combines existing grants that encourage partnerships between businesses of all sizes. It offers funding of up to 70% of qualifying costs, including costs related to knowledge transfer, co-innovation, business development and internationalisation. The PACT Scheme may be of interest for SMEs that interact with larger companies and would like to further develop those relationships.
Parting Thoughts & Alternatives
Singapore's 2018 budget reorganized existing grants to streamline the funding process. SMEs that plan to upgrade their technological capabilities, expand internationally or partner with other businesses may be able to subsidise their costs through one of these three grant programs. SMEs that do not qualify for these grants or have specific financing needs should consider one of the many other financing options available to Singaporean small businesses, such as debt or equity funding from banks, venture capital firms and online crowdfunding platforms.