Budget 2023: Enhancements to enterprise financing schemes, Energy Efficiency Grant extended to Mar 2024
THE government will extend current enhancements to the Enterprise Financing Scheme (EFS), along with the Energy Efficiency Grant (EEG) for another year, in a bid to assist small and medium-sized enterprises (SMEs) here with tighter financial conditions and higher energy prices.
The enhancements to the EFS include trade loans, working capital loans and support for domestic construction projects via project loans, will be extended for another year till Mar 31, 2024.
Under the EFS – Trade Loan scheme, the enhanced government risk share of 70 per cent will be maintained, said Finance Minister Lawrence Wong in his Budget speech on Tuesday (Feb 14).
The EFS – Trade Loan scheme finances the trade needs of SMEs here, such as inventory and stock financing, for both domestic and overseas transactions.
SMEs will also continue to be able to tap on the EFS – Working Capital Loan, which finances the operational cash flow needs of businesses at a maximum loan quantum of S$500,000.
Construction SMEs with domestic projects are also able to continue to loan up to S$30 million per borrower.
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Said Wong: “I hope this will also encourage financial institutions to continue extending credit to viable enterprises.”
The EEG, meanwhile, was announced in June 2022 to help firms cope with rising energy costs in the wake of Russia’s war in Ukraine. (*see amendment note)
This initiative provides funding of up to 70 per cent for the implementation of pre-approved, energy-efficient machinery by SMEs operating in the food services, food manufacturing, and retail sectors. Assistance is capped at S$30,000 per company annually.
With the extension, applications for the EEG will be open to Mar 31, 2024.
*Amendment note: A previous version of the article said that the EEG was introduced in June 2022. It was actually announced in June 2022 and launched in September 2022.
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