The Importance of Business Grants for SMEs in Singapore
Running a small or medium-sized enterprise (SME) in Singapore isn't easy. Founders, CMOs, CTOs, and CFOs often wear many hats, juggling everything from funding and growth to innovation. A significant challenge faced by SME’s in Singapore is often in scaling operations, adopting new technologies, upskilling the people and expanding into new markets.
For founders and C-suites, understanding the importance of these grants is imperative for crucial planning and success. This is where business grants come in. They’re like a financial lifeline, providing crucial support that helps bridge gaps, promote innovation, and expand markets.
Grants are funds provided by the government or other organisations to support specific projects or business needs without the expectation of repayment. These funds can be game-changers for SMEs, helping with everything from financial support and innovation to market expansion and risk reduction. Let’s dive into why business grants are so important for SMEs in Singapore.
Types of Grants
Before diving into the importance of business grants and how specific grants can benefit SME’s and TACs in Singapore, let’s quickly dive into the different types of grants available. The government of Singapore offers grants for every stage of the company’s growth. These grants are tailored to address various business needs, from innovation and technology adoption to market expansion and workforce development.
In one of my previous articles, I have mentioned the different types of grants for local businesses in Singapore. Here’s a quick snapshot of the more popular grants that I recommend:
- Enterprise Development Grant (EDG): The EDG is one of the most comprehensive grants available for SMEs in Singapore. It supports projects that help upgrade, innovate, grow and transform an SME. The grant covers up to 50% of qualifying project costs in areas such as core capabilities, innovation and productivity, and market access.
- View all grants under EDG using the Grants Navigator
- Market Readiness Assistance (MRA) Grant: For SMEs looking to expand overseas, the MRA grant offers support for activities such as market feasibility studies, overseas market setup, and market promotion. It covers up to 50% of eligible costs, capped at SGD 100,000 per company per new market. This enhanced grant cap has been extended until 31 March 2025.
- View the comprehensive guide for Market Readiness Assistance Grant which covers eligibility criteria, application process and outcomes.
- Digi-TAC Grant: This grant has been structured specifically to support Trade Associations & Chambers (TAC’s) in two critical areas:
- Adoption of digital solutions
- Training for secretariat staff
- This grant covers upto 70% qualifying costs upfront, making it easy for the TACs to embrace digital technology and training.
- Understand how Digi-TAC can help transform your organisation
These are just a few examples of the grants available for SMEs and TACs in Singapore. Each grant has a specific purpose which allows businesses to overcome their unique challenges and capitalize on growth opportunities.
Use cases: How SMEs Have Benefited From Grants
Let’s take a quick look into the tangible benefits of business grants and they help improve the topline metrics of the business.
SaaS Company for Cybersecurity Solutions
One of our projects faced the challenge of scaling its operations, unifying customer data and updating the digital infrastructure for a better user experience. We partnered with the cybersecurity solutions provider to undertake a digital transformation project with the help of EDG grants.
This included CMS migration, new information architecture to encompass product portfolio, , building a dynamically updated directory of vulnerabilities, data strategy implementation to unify all customer data across all touchpoints and setting up of business intelligence dashboards.
Fintech Company for Cross Border Payment Solutions
We partnered with the FinTech company for a comprehensive digital transformation process to overcome challenges of managing the user experience on a legacy CMS, leverage data effectively while maintaining data privacy and gaining actionable insights from the product usage for business optimisation.
To overcome these challenges, we implemented a robust tech stack including Webflow, Segment, Fullstory and Looker Studio. This combination of tools focussed on improving multi-national, multi-lingual website performance, customer relationship management, unified customer data, data analytics dashboards and business intelligence reports.
This enabled the client to better understand their customers, optimise their product offerings, and make data-driven decisions. The outcome is a more technologically advanced and data-centric operation to better serve customers in the highly competitive FinTech space.
How Government Grants Provide Support for SMEs and Businesses
Singapore’s small business grants can be a huge help for SMEs. Different grants cover a range of expenses, like capital expenditures, operational costs, and development projects. Traditional financing can be tough to secure due to strict requirements and high interest rates, but small business grants offer a non-repayable alternative, easing financial burdens and helping businesses allocate resources more effectively. However, it's worth noting that companies typically need to invest money upfront on projects, as grant funding usually operates on a spend-then-claim basis, and grant funding typically covers from 50% to 80% of overall investment.
However, business grants are more than financial assistance providers, they can be leveraged as strategic tools that can help businesses take the leap towards innovation and growth.
Impact on Business Growth and Sustainability
Grants do more than just keep daily operations running—they also fuel growth. SMEs can use these funds to scale operations, invest in new technologies, and improve their products or services. By easing long-term financial strain, grants allow businesses to focus on strategic growth initiatives and sustainability.
Expanding into new markets, launching new products, or scaling operations all require significant investment. Business grants can help SMEs fund these growth initiatives without depleting their financial reserves.
This is especially important for Singaporean companies, which often hit growth ceilings in the local market and need to look regionally to continue expanding.
The MRA grant, for instance, supports SMEs in their international expansion efforts by covering costs related to market research, overseas marketing, and establishing a presence in new markets. Similarly, the EDG can be used to fund projects that drive innovation and increase competitiveness, such as product development or process optimization.
Potential for Digital Transformation
Digital transformation can be a costly endeavor, especially for SMEs with limited budgets. Grants like the EDG and PSG provide the necessary financial support to implement digital solutions that enhance productivity, streamline processes, and improve customer engagement.
Tech startups can use grants to invest in advanced software solutions, which can significantly increase efficiency and drive revenue growth. For example, an SME looking to upgrade its e-commerce platform or implement a customer data platform (CDP) can use these grants to cover the costs, making it easier to stay competitive in the digital marketplace.
Risk Mitigation
Undertaking new projects or entering new markets always involves a certain level of risk. Grants can help mitigate this risk by providing a financial cushion. For example, an SME looking to implement a new technology may face uncertainty regarding its return on investment (ROI). By securing a grant to cover a portion of the costs, the business can reduce its financial exposure and proceed with the project with greater confidence.
Grants for market Expansion
Expanding into new markets can feel pretty overwhelming for SMEs because of the high costs and risks involved. But don't worry—small business grants in Singapore are here to help! These grants provide financial support to make it easier for businesses to explore and enter new markets. There are several grants specifically designed to help SMEs with overseas expansion by covering the costs of market promotion, business development, and setting up operations abroad.
Supporting Employee Training and Skill Development
Investing in employee training and skill development is essential for maintaining a competitive workforce. Grants like the SkillsFuture Enterprise Credit (SFEC) and the Enhanced Training Support Package (ETSP) provide financial support for SMEs to upskill employees and improve their competencies.
Given the restricted budgets for training SME’s typically have, and the concerns of employees leaving, grants can significantly reduce the financial and operational risks.
Maximising the Impact of Business Grants
To fully capitalise on the opportunities provided by business grants, SMEs need to approach the application process strategically.
- Understand the Eligibility Criteria: Each grant has specific eligibility criteria, and it's important for SMEs to understand these before applying. This includes factors such as the company's size, industry, and the nature of the project. For example, the EDG is open to SMEs that are registered and operating in Singapore, have at least 30% local shareholding, and have a group annual sales turnover of less than SGD 100 million or less than 200 employees.
- Prepare a Comprehensive Project Proposal: A well-prepared project proposal is key to securing a grant. This should include a clear description of the project's objectives, the expected outcomes, and a detailed budget. It's also important to demonstrate how the project aligns with the grant's goals, such as improving productivity, driving innovation, or expanding market access.
- Leverage Expert Support: Navigating the grant application process can be complex, especially for SMEs with limited experience in this area. Engaging a partner with expertise in grant applications can greatly improve the chances of success. For instance, Devhaus assists SMEs scope the entire project and build a proposal with certified consultants to submit grant applications, ensuring that all requirements are met and that the application is as strong as possible.
- Monitor and Evaluate the Project's Progress: Once a grant is secured, it's important to monitor the project's progress and evaluate its outcomes. This not only ensures that the project stays on track but also provides valuable insights for future grant applications. Each key initiative enlisted in the project proposal must be implemented and results for the grants to be approved.
- Calculate the ROI: While grants reduce the financial burden of a project, it's still important to calculate the expected return on investment (ROI). This helps SMEs assess the project's viability and make informed decisions about resource allocation. For example, if an SME is using the EDG to implement a new CRM system, the ROI could be measured in terms of increased sales, improved customer retention, or reduced operational costs.
Unlocking Growth and Resilience for Small Businesses in Singapore
Business grants not only provide immediate financial relief but also enable SMEs to build a stronger, more competitive, and professional business that is well-equipped for sustainable growth and long-term success. For business leaders, it is imperative to understand the leverage these grants offer to drive long term success.
At Devhaus, we understand the challenges faced by SMEs and are committed to helping businesses leverage technology and grants to achieve their goals. Our expertise in implementing tech stacks and securing grants can significantly enhance your business performance, ensuring long-term success and sustainability.
Next Steps:
- Start by assessing your company's needs, the core focus of your business.
- Identify the grants that align with your business objectives and requirements as well as financial capabilities.
- Reach out to Devhaus for recommendations and project implementation.
Book a free 30 minute consultation with our team to understand how your business can leverage funding for accelerated growth.
