Ravi Chandran
Finance Minister Heng Swee Keat presented the 2019 Budget in Parliament and some existing business financing schemes were enhanced in it.
By: Hitesh Khan/
With the intention of deepening the capabilities of enterprises, several financing schemes were extended and/or enhanced in Budget 2019. SME Co-Investment Fund was among such financing schemes which was extended and enhanced.
To catalyse patient growth capital for Singapore-based enterprises through co-investment with the private sector, the Government launched the Co-Investment Programme (CIP) in 2010, comprising the SME Catalyst Fund (CF) and SME Co-Investment Fund (CIF). The SME Mezzanine Growth Fund (MF) and SME Co-Investment Fund II (CIF 2) were subsequently launched in 2014.
To date, the Government has set aside $400 million of government capital through these funds, to be invested alongside private sector capital into local SMEs. This has catalysed approximately $1.3 billion of additional funding for our SMEs. The CIP has supported Singapore-based SMEs, in a range of industries from services to manufacturing, to scale up and internationalise.
Budget 2019 launched the SME Co-Investment Fund III to be among the key financing schemes to benefit Singapore businesses.
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The Government said that it will set aside an additional $100 million for the SME CoInvestment Fund III, to continue supporting firms in their efforts to scale up and internationalise. The SME Co-Investment Fund III will continue the work of the earlier SME Co-Investment Funds, with the same objective of catalysing active and patient growth capital for Singapore-based SMEs.
Similar to existing funds under the CIP, Temasek Holdings will participate as a co-investor in the SME Co-Investment Fund III. Qualifying investee companies must have their key management functions and headquarter activities based in Singapore, and have revenues of up to $500 million.
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The SME Working Capital Loan is also among the financing schemes which will be extended and enhanced.
In 2016, the Government enhanced support for SMEs to access financing for working capital needs by introducing the SME Working Capital Loan. The Government will extend this support for another two years till 31 March 2021.
This will help address Singapore SMEs’ near-term cash flow concerns and growth financing needs through unsecured working capital loans, while encouraging business growth and restructuring activities. The Government said that this level of support for working capital will be reviewed at the end of this period.
The Government is expected to launch the Enterprise Financing Scheme (EFS) in October 2019, and with that, the SME Working Capital Loan will be folded into the EFS.
The Enterprise Financing Scheme (EFS) streamlines eight existing SME financing schemes, including the extended SME Working Capital Loan, into one scheme to help Participating Financial Institutions (PFIs) and SMEs navigate
between the various financing schemes.
The EFS will meet the financing needs of companies across different stages of growth over six financing areas:
- Working capital (for SMEs),
- Fixed assets (for SMEs),
- Trade,
- Venture debt,
- Mergers and acquisitions, and
- Project financing.
Businesses may apply for the EFS through Participating Financial Institutions (PFIs). Budget 2019 said that additional details related to EFS will be announced closer to launch. In the interim, companies can continue to apply for the existing financing schemes.
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Besides these financing schemes for enterprises, the Government is also launching the Innovation Agents Programme.
The Innovation Agents programme is a two-year pilot for enterprises to obtain advice on innovation opportunities from experienced industry professionals who have both technology expertise and business experience (henceforth known as Innovation Agents).
To support enterprises in their innovation efforts and accelerate their growth, Enterprise Singapore will identify individuals with deep expertise in technology, strong track record in growing businesses, and access to global industry networks.
These Innovation Agents will be matched with enterprises that aspire to use technology to improve existing businesses or build new ones. Innovation Agents will provide mentorship to enterprises to identify innovation opportunities, and facilitate connections to valuable technology and business partners.
Depending on enterprises’ needs, Innovation Agents may provide consultation on a one-to-one basis, or on a group basis to groups of enterprises or consortia looking to capture new market opportunities through innovation. The duration of an engagement may vary from a few months to a year, depending on its scope. More details will be shared by Enterprise Singapore later this year.
With the Innovation Agents programme, the Government will also be expanding the SMEs Go Digital programme. The SMEs Go Digital programme was announced in Budget 2017, and it helps SMEs grow digital capabilities. Budget 2019, announced that IMDA will further expand the SMEs Go Digital programme.
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