Government Grants for Small Businesses in Singapore  

Singapore is one of the few governments worldwide that make tremendous efforts to uplift small and medium businesses.  

Various small business grants and incentives are available to entrepreneurs and business owners based in Singapore. These grants provide them with resources and financial aid, enabling the business to achieve their operational and strategic goals. These grants include tax subsidies, funding support, angel funding, and other incentives.  

However, each grant has specific criteria, and you need to understand whether your business is eligible for one. Here are some of the major government grants for small businesses in Singapore:  

1. Enterprise Development Grant (EDG) 

First introduced in 2018, the EDG facilitates startups with subsidies in 3 key areas — Core Capabilities, Innovation and productivity, and Market Access.  

• Core Capabilities: Help businesses prepare for expansion and transformation by strengthening their core foundations such as economic management, service excellence, human capital development, brand & marketing development, and business strategy development.  
• Innovation & Development: Refers to process redesign, product development, and process automation. For example, when a company plans to automate or speed up operations by installing advanced technology.  
• Market Access: Available to companies ready to expand their operations overseas. The EDG can cover some expansion costs if the company is eligible for the grant. This also includes acquisitions & mergers, pilot projects (an initial small-scale implementation used to test the viability of an idea), and standards adoption.  

Enterprise Singapore (ESG) offers and manages The EDG and covers up to 70% of the qualifying project costs for SMEs and up to 50% for non-SMEs.

Eligibility Criteria of EDG  

To be eligible for the EDG, your business must meet the following criteria:    

• Business registered and operated in Singapore.  
• Local shareholders should own at least 30% of the shares.  
• Must be financially viable to start and complete the underlying project.  

2. Startup SG Founder Grant 

Startup SG Founder is designed explicitly for fresh (first-time) entrepreneurs. You can raise capital of up to S$50,000 once your application gets approved. You will receive S$5 for S$1 raise — Capped at S$50,000. It means to avail the entire S$50,000, you must raise or contribute a minimum of S$10,000 equity.  

The startup SG founder grant is for changing the mindset of freshers and mid-career professionals who dread the idea of becoming entrepreneurs. This grant provides them with mentorship alongside financial aid.  

Financial aid of S$50,000 is issued within 12 months in 2 or more tranches depending on the type of the project. In some cases, there is a link to the project’s milestones.  

Eligibility Criteria of Startup SG Founder 

All Singapore citizens (SC) and permanent residents (PR) are eligible for the startup SG founder if they meet the following criteria:  

• The company should have a minimum of 3 SC/PR applicants, and at least 2 of them must be first-time entrepreneurs. Also, these applicants must own a total of at least 30% of the overall equity. 
• You must apply for the startup SG founder within the first 6 months of incorporation. 
• Singapore Citizens or residents must own at least 51% of the shares. 
• The main applicants must not be employed full-time by another employer. They should be able to make important business decisions and must have a reasonable amount of time for the startup. Moreover, they must not have received funds for the idea from other government organizations. 
• The business must not be a restaurant/cafe, nightclub, lounge, bar, massage Centre, or employment agency, and must not offer/promote gambling or other immoral services.

3. Enterprise Financing Scheme (EFS)  

The EFS is a grand financing scheme administered by Enterprise Singapore (ES) that aims to provide various financing instruments to small and medium businesses (SMEs) in Singapore. The good thing about EFS is that it includes 6 different financing schemes available for the specific growth phases of the business. They are:  

Working Capital Loan: 

Loan for day-to-day operations of SMEs up to $300,000 per borrower. The working capital loan is not backed by collateral, meaning that you do not need to provide something as a guarantee of repayment. 

Fixed Assets Loan: 

Available to SMEs to purchase machinery, equipment, and other fixed assets. Both locally and overseas. It also covers the construction and development costs of setting up factories and other business premises.   

The fixed asset loan is capped at S$30 million. It has a maximum repayment period of 15 years and is available to SMEs on a 50% risk-sharing basis, which means the business itself must contribute at least 50% equity. For new businesses, the ES may demand up to 70% risk-sharing.  

Venture Debt Loan: 

The venture debt loan is for high-growth startups which provides you with venture debt, a hybrid of equity and loan. If your business is not eligible for loans from mainstream banks and other lenders, the venture debt loan is the way to go! You can raise up to $8 million by applying for a venture debt loan with a repayment period of 5 years. The risk share is 50% for an established business and 70% for new businesses. 

Trade Loan: 

A trade loan is a trade financing facility through which you can finance your imports and working capital. Moreover, you can also exercise the trade loan for factoring — That is when you sell your accounts receivables for working capital purposes and other business transactions. The loan repayment period is one year, and the risk share is 70%.  

Project Loan: 

The Project Loan is a secured loan specifically offered to finance overseas projects. Businesses in Singapore can raise up to $30 million under this scheme. The loan repayment period is under 15 years. The risk share is 50% for an established business and 70% for a new business.

Mergers & Acquisitions (M&A) Loan: 

Capped at $50 million, the M&A loan is a fantastic way to finance acquisitions and mergers intended to internationalize your business or expand your business via domestic M&A activities. This loan repayment period is 5 years. The risk share is 50% for an established business and 70% for a new business.  

3. Venture for Good (VFG)  

Whether you are just starting up or running an established business in Singapore, you can tap into VFG for grants up to $100,000. VFG is available to companies that strive to solve Community/Social issues in Singapore. Examples include:  

• Education and skills development.  
• Businesses that work on providing basic human needs such as housing, food, and transport.  
• Health care and social care products such as mental health products.  
• Employment opportunities and capacity building.  

This scheme is available by Raise which is a sector developer and membership body for aspiring social entrepreneurs. The funds are reimbursed across three tranches, once every six months.  

Eligibility Criteria of VFG 

Small and medium business owners are eligible for the VFG grant if:    

• The main applicant is either a Singapore citizen or resident and aged between 18-35.  
• The country of the business incorporation is Singapore (registered under the Companies Act or Co-operative Societies Act).  
• Your business is registered with Raise — The regulatory body of the VFG grant. 
    

Which Government Grant in Singapore Is Best for Your Small Business? 

Each of the grants listed above has its pros, but before analyzing all the grants, you first need to check your business’ eligibility for the grants since some of them have strict criteria.  

Once you know the status of your eligibility, it is time to analyze each of the grants and their effects on your business operations and accounting. If you do not have a qualified accounting professional in your organization, you might need external help. 

About Automa8e: 

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