Boosting local businesses for the future

Faced with persistent challenges such as soaring inflation and access to capital, Singapore enterprises should take full advantage of the business support measures announced in the Government’s latest Budget to ensure their long-term ability to compete and grow.

According to DBS Bank’s SME Budget Survey 2023, SMEs ranked “rising global interest rates” (50%), “labour costs and availability” (43%) as their top concerns, followed by “Inflation” (36%), GST hike (26%) and supply chain disruptions (25%). Meanwhile, “Ensuring consistent cashflow and managing cost” remained the SMEs’ top business priority in 2023. 

The need to adopt sustainable practices is another urgent area of focus for businesses. The Bloomberg Catalysts of Sustainability survey found that around 83% of small companies and 92% of medium-sized companies have a ESG strategy in place or are creating one, but only 37% have a clear roadmap on how to achieve their goals.

According to Koh Kar Siong, group head of SME Banking at DBS, Budget 2023 offers a holistic suite of schemes that not only addresses these pain points faced by local firms, but also helps them develop capabilities to innovate, internationalise and build sustainable businesses.

“The measures announced in the Budget will strengthen SMEs in a continued volatile environment, provide assurance in the face of challenges and help them become globally competitive. Business owners should study and embrace the Budget and not miss the opportunity to benefit from the various support schemes offered,” said Koh. 

Managing rising costs and driving innovation

Koh noted that the extensions to the Enterprise Financing Scheme (EFS) and Energy Efficiency Grant (EEG) announced in Budget 2023 will provide a financial safety net to SMEs that are most affected by rising costs. Current enhancements under these schemes will be extended for another year until 31 March 2024.

The EFS offers a 70% Government risk-share for trade loans, an enhanced maximum quantum for trade and working capital loans, and support for domestic construction projects through project loans. Meanwhile, the EEG will provide those in the food services, food manufacturing or retail sectors, support of up to 70% of qualifying costs, capped at $30,000, for the adoption of a pre-approved list of energy efficiency equipment.

To encourage businesses to engage in research and development (R&D), innovation and capability development activities, the Singapore Government also rolled out a new scheme called the Enterprise Innovation Scheme (EIS). Among other benefits, companies can enjoy tax deduction of up to 400% for R&D expenses incurred in Singapore, including prototyping, testing and trial production.

Encouraging overseas expansion

With borders re-opening, local firms can revisit and accelerate their internationalisation plans by tapping on the Singapore Global Enterprises initiative, which received a S$1 billion boost in the Budget. 

Under this scheme, SMEs will have access to customised programmes to help them build specialised capabilities and innovation, accelerate globalisation plans, as well as foster partnership with other companies.

Another S$150 million will also be added to the SME Co-Investment Programme (CIP) to invest in promising SMEs. This is on top of the $1 billion the Government has already invested in local SMEs through Heliconia Capital Management. 

“The CIP is a big statement by the Government that they are prepared to back promising local enterprises that are keen to venture beyond Singapore’s shores,” said Koh.

A trusted partner to SMEs

Koh urged SMEs that are already in the process of transforming their businesses to utilise the grants and other incentives offered under Budget 2023 to fuel their growth plans. 

For those that are still in the early stages of their transformation journey, or unsure about how to proceed, DBS provides a range of initiatives that can help them on their way, and better position them to benefit from the Budget support measures.

For instance, DBS offers digital solutions through partnerships with leading technology partners such as Xero, which provides cloud-based accounting software for small businesses. The bank is also able to connect SMEs to new ideas and opportunities through its comprehensive regional network and ecosystems which have been expanded in recent years through key acquisitions and investments in China, India and Taiwan. 

To equip SMEs with emerging skillsets and strengthen their competencies for an ever-changing business landscape, DBS' SME Academy features a partnership with SkillsFuture Singapore with a range of development courses. 

SMEs can also engage with industry experts and like-minded business owners through the DBS Disrupt Series under its BusinessClass community platform which provides curated content and programmes. For instance, the Disrupt – The Future of Sustainability event held in March aimed to inspire SME entrepreneurs to embark on their green journey, identify the kind of support they need to transition and capitalise on opportunities in the sustainability space.

Safest bank in Asia for 14 consecutive years

More than ever in uncertain times, SMEs need a safe and strong banking partner. “DBS’ solid balance sheet, robust risk management and long track record of success in serving SMEs in the region, give customers confidence and peace of mind,” said Koh. 

DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022. In 2022, DBS was named ‘World’s Best SME Bank’ by Euromoney for the second time.

“Beyond our strong financial position, we have a resilient and secure digital infrastructure, as well as pioneering innovative solutions to propel SMEs to the next level of growth,” said Koh. “More importantly, we are purpose-driven – committed to doing the right thing and standing by our customers through good and difficult times.”
 

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