Singapore Budget 2020 – Access Financing

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Singapore Budget 2020 – what does it have in store for business owners and entrepreneurs? The economy has been decreasing slowly and business growth is affected. As your business deals with new challenges and complexities, how can you stay nimble and embrace transformation to take advantage of emerging growth opportunities?

New measures and initiatives are introduced in Singapore Budget 2020 to help businesses including startups to develop new capabilities, deal with short-term challenges and set the stage for long-term growth. It can no longer be the same old same old. What works today might not work tomorrow. Additionally, businesses need to constantly keep abreast of current market trends so as not to go into stagnancy or obsoletion.

singapore budget

Here are some financing initiatives in Singapore Budget 2020 business owners might find useful to help them tide through the rough times:

#1 Temporary Bridging Loan Programme (TBLP)

Financing support in Singapore Budget 2020 to alleviate cashflow needs of enterprises affected by the COVID-19 outbreak.

SUPPLEMENTARY BUDGET

  • Programme will be expanded from the tourism sector to all sectors from 1 April 2020.
  • Maximum loan quantum will be increased from S$1 million to S$5 million, with interest rate capped at 5% per annum.
  • Risk-share from Government will be increased from 80% to 90%
  • Valid from 8 April 2020 to 31 March 2021
  • SMEs may request for deferment of principal repayment for one year, subject to assessment by participating financial institutions.

Updated on 12 October 2020:

  • Programme will be extended by 6 months (from 1 April 2021 to 30 September 2021) with the following level of support during this period:
    • 70% risk-share from Government.
    • Maximum loan quantum of S$3 million.

#2 Enterprise Financing Scheme – SME Working Capital Loan (EFS WCL)

SMEs will receive greater financing support in Singapore Budget 2020 to bridge their working capital gaps.

SUPPLEMENTARY BUDGET

  • Maximum loan quantum will be raised from SS$600,000 to S$1 million.
  • Risk-share from Government will be increased to 90% from 80% (previously at 50-70%).
  • Valid from 8 April 2020 to 31 March 2021.
  • SMEs may request for deferment of principal repayment for one year, subject to assessment by participating financial institutions.

#3 Enterprise Financing Scheme – Trade Loan (EFS TL)

SUPPLEMENTARY BUDGET

  • Maximum loan quantum will be increased from S$5 million to S$10 million.
  • Risk-share from Government will be increased to 90% from 80% (previously at 50%-70%)
  • Valid from 8 April 2020 to 31 March 2021

Updated on 12 October 2020:

  • Programme will be extended by 6 months (from 1 April 2021 to 30 September 2021) with the following level of support during this period:
    • 70% risk-share from Government.
    • Maximum loan quantum of S$10 million.

#4 Loan Insurance Scheme

SUPPLEMENTARY BUDGET

  • Increased support for the LIS insurance premium from 50% to 80%.
  • Valid from 1 April 2020 to 31 March 2021.

#5 Section 13H and the Fund Management Incentive 

  • Section 13H (S13H) and the Fund Management Incentive for S13H approved funds (FMI) in Singapore Budget 2020 aim to encourage investments into Singapore based companies and startups.
  • Both will be extended by five years to 31 December 2025.
  • New enhancements will further encourage investments into unlisted Singapore-based enterprises (including startups), by streamlining the qualifying investment criteria and expanding the scope of incentivised income streams and legal structures.

Effective from 1 April 2020. More Singapore Budget 2020 details will be announced in March 2020.

In summary, business owners and employees in Singapore have their own roles to play besides various support schemes to turn to for business continuity and employment. Apart from applying for monetary grants, one major factor is to ensure employees stay relevant by upgrading their skills. The COVID-19 pandemic has definitely taught all of us this key point.

As consumer behaviour evolves and technology advances at a rapid rate, the customer experience needs to be a great and personalised encounter. Businesses will also need to be agile in their processes and business development by performing a regular review to be able to thrive in a slow economy. That is how Singapore will bounce back from the slow economy.

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