3 Takeaways SMEs Need To Know From Budget 2019
On Monday, 19 Jan 2019, Finance Minister Heng Swee Keat delivered the Budget 2019. Mr Heng announced new initiatives and expansions worth S$1 billion, aimed at enabling businesses to grow. Here is how Budget 2019 will impact your business.
The budget outlines three areas of focus to deepen enterprise capabilities:
1. Customised Assistance
The budget highlights two programmes help you identify and overcome business challenges – the Scale-up SG programme and the Innovation Agents programme.
The Scale-Up SG programme is an initiative by Enterprise Singapore that partners you with companies in both private and public sectors to provide you with advice on how to scale up your business.
The Innovation Agents programme allows you to tap on the expertise of experienced industry professionals by matching innovation experts with your business. The experts will provide you with advice on innovation and commercialisation opportunities.
2. Increase Technological Adoption
The SMEs Go Digital programme that was launched in 2017 will be expanded to other sectors. The programme aims to help you use digital technologies and improve digital capabilities in areas such as accounting, human resources management and payroll, digital marketing, digital transactions and cybersecurity.
The programme will also provide your business with Industry Digital Plans (IDPs) which contains advisories on which digital technologies to adopt.
3. Improved Financing Options
Mr Heng announced an additional S$100 million for an SME Co-Investment Fund III. This is in addition to S$400 million set aside since 2010 to invest in SMEs, alongside the private sector.
Existing schemes by Enterprise Singapore will be streamlined into a single Enterprise Financing Scheme which will be launched in October.
The SME Working Capital Loan Scheme will be extended for two more years, until March 2021. It will then be folded under the Enterprise Financing Scheme.
Under the Enterprise Financing Scheme, the government will take on up to 70 per cent of risk for bank loans to younger companies that have incorporated for less than five years.
As you look forward and plan for the fiscal year 2019, it is wise to stay updated with government initiatives that may provide financial support for you and your business. On top of that, you may also want to look into alternative financing options such as Peer-to-Peer lending(P2P) to help to fund new and additional projects.
P2P lending is an offshoot of crowdfunding that matches investors and SME-owners through an online platform. You can take up a loan for your business while investors that collectively funded these loans will earn an interest in return. P2P lending holds many advantages for SME-owners as it has an easier and quicker application process than traditional financial institutions and requires no collateral. This enables many SMEs with limited credit history to obtain business funding.
For further reading, check out our definitive business financing guide where we will endeavour to cover all aspects of financing your business.