Resilience Budget: More support for firms to upgrade capabilities

Singapore

BUSINESSES preparing for recovery can benefit from enhancements to existing schemes that will help them digitalise, restructure and upgrade.

Deputy Prime Minister and Finance Minister Heng Swee Keat on Thursday announced enhancement packages to the Enterprise Development Grant (EDG), Productivity Solutions Grant (PSG) and the SME Go Digital Programme, as part of his Resilience Budget. These enhancements will last till the end of the year.

Starting April 1, support levels for the EDG and PSG will be raised to 80 per cent, up from 70 per cent before, in order to spur transformation.

But for companies severely impacted by Covid-19, maximum support levels for the EDG - to subsidise those undertaking projects to spur innovation, productivity and enhance core capabilities - will be capped at 90 per cent instead, and granted on a case-by-case basis.

The government will also expand the scope of pre-approved digital solutions under the PSG, to help more SMEs implement safe distancing and business continuity measures.

Under SMEs Go Digital, SMEs can receive funding support for the adoption of these pre-approved digital solutions through the PSG, said Mr Heng.

From May 1, IMDA and Enterprise Singapore will also provide up to 80 per cent funding support for enterprises to adopt advanced digital solutions, which can cover costs for infrastructure, hardware and software, cyber security and many others.

"There are significant cost savings in the new enhanced packages, and surviving companies who are already thinking about undertaking such projects will welcome it dearly," said Vihang Patel, co-founder and chief executive of Finaxar, a fintech firm that provides business loans to SMEs.

However, many raised concerns that these upgrading measures target the least of an SME's worries, as they continue to grapple with a reduced cash flow and disruptions to their supply chain. The biggest concern for most businesses now is not optimisation, but survival, said Mr Patel.

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