By: Bea Dyra Boquiron
|01 Aug 2024
A business grant is a type of funding provided by the government or other organisations to businesses. Grants support the economy by helping entrepreneurs start a new business, expand an existing one, or develop new products and services. Businesses are supported via cash, equipment, training programs, and more to grow and succeed. Among available grants, the PSG Grant in Singapore is notable for its support for technology adoption to enhance business efficiency. It’s a great opportunity for local businesses to stay competitive and thrive in the ever-changing business landscape.
In this article, we will discuss the different types of grants that are available for local businesses in Singapore in 2024.
All businesses, whether small or large, can benefit from grants. If you are a local SME, you might wonder when is the right time to apply for a grant. While there is no perfect answer, here are some situations where you should consider applying for a grant:
Expand to new larger markets locally and internationally: If you are planning to expand your business to new markets, it is a good idea to consider grants that can help with market research, training programs, and marketing initiatives. This will ensure that your expansion is well-planned and executed effectively.
Invest in the right systems to cater to huge growth: As your business grows, it is essential to have the right systems and technology in place to support this growth. Grants like the PSG Grant in Singapore can help businesses adopt new technologies and enhance their operations, making them more efficient and effective.
Develop or improve products and services: Innovation is key to staying competitive in any industry. With grants for research and development, businesses can explore new ideas, develop new products, or improve existing ones. Such development can make your product/service more differentiated and attractive to customers.
The good news is that there are several types of grants available for small businesses in Singapore. Each is designed to cater to different needs and goals. Here are some of the most popular grants:
Government SME Grants are offered by the Singapore government to support and encourage the growth of SMEs. These grants cover a wide range of areas, including technology adoption, international expansion, productivity enhancement, and more.
Some popular Government SME Grants include:
Many businesses opt for the PSG to adopt pre-approved digital solutions that help enhance their operational efficiency and productivity. Eligible projects include IT solutions, equipment and consultancy services.
PSG Coverage: SMEs are eligible for up to 50% Productivity Solutions Grant (PSG) support for a Pre-Approved Solution under the IMDA SMEs Go Digital programme.
Eligibility:
Registered and operating in Singapore with at least 30% local equity
Group Annual Sales Turnover not exceeding $100 million or Group employment size not exceeding 200 employees.
IT solutions must be used in Singapore
Registered business entity that is not a charity, IPC, VWO or religious entity.
Read more about the PSG Grant here.
The EDG is a comprehensive grant that supports businesses in their growth and transformation journey. Some eligible projects include business strategy development, financial management, automation, standards adoptions and more.
PSG Coverage: It covers up to 50% of qualifying project costs for SMEs, such as consultancy fees, equipment purchases, and third-party vendor costs.
Eligibility:
Business entity registered and operating in Singapore with at least 30% local equity.
Financially able to complete the project based on key financial indicators.
Read more about the EDG Grant here.
The MRA Grant helps SMEs expand into new markets overseas including participation in overseas trade fairs, employee deployment in overseas markets, application for IP protection and trade credit insurance abroad.
MRA Coverage: Covers up to 50% of eligible costs in market expansion activities. Some expansion activities covered
Eligibility:
Business entity registered and operating in Singapore with at least 30% local equity.
Expanding to overseas market for the first time.
Group Annual Sales Turnover not exceeding $100 million or Group employment size not exceeding 200 employees.
Find out more about the MRA Grant here.
Most grants only cover a percentage of eligible costs so you still need to fork out a proportion of the total value. SFEC comes in to support such out-of-pocket expenses on top of grant support. SFEC-supported programmes include PSG, EDG, MRA and more.
SFEC Coverage: SFEC can cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives. This means that if the PSG supports 50% of the total cost of a project, SFEC can support up to 90% of the remaining fees. With enough SFEC credits, businesses might only need to pay 5% of the total project cost after reimbursement.
Check the Business Grants Portal (BGP) to check your SFEC balance.
Government startup grants specifically support early-stage businesses with potential for growth and innovation. These grants provide funding and resources to help startups overcome the initial challenges of starting a business, such as lack of capital and resources.
Some of the most popular government startup grants include:
Startup SG Founder – The Startup SG Founder provides funding and mentorship for first-time entrepreneurs. This grant aims to encourage more individuals to take the leap into entrepreneurship without having to worry about high start-up costs. It offers up to $50,000 in funding and a mentorship program from Accredited Mentor Partners (AMPs). Mentorship opportunities include pitch training, networking opportunities with investors and accounting support.
Startup SG Tech – The Startup SG Tech grant supports research and development efforts for deep technology startups in two stages. The first stage provides up to $250,000 in funding for proof-of-concept projects, while the second stage offers up to $500,000 in funding for prototyping and commercialisation. This grant is suitable for tech startups looking to develop innovative solutions.
Startup SG Accelerator – Compared to other grants, Startup SG Accelerator focuses on scaling up existing startups. It offers funding of up to $50,000 for startups in their early stage and up to $500,000 for more mature startups looking to expand internationally. This grant also provides mentorship opportunities and access to networks and resources.
So the question is, who can apply for these government startup grants? Generally, eligible applicants include Singapore-registered companies with a minimum of 30% local shareholding. However, specific requirements and eligibility criteria vary depending on the grant. For example, some grants may have age or industry restrictions.
Moreover, to qualify for these grants, startups are required to have a viable business plan and demonstrate potential for growth and innovation. This can be presented through market research, revenue projections, and other relevant documents. Also, applicants may have to go through an evaluation process to ensure that they are eligible for the type of project they are applying to.
It’s also worth noting that some grants are open to startups and SMEs from all industries, while others are specifically designed for certain sectors such as fintech, healthcare, environmental and social enterprises. It’s essential to carefully review the eligibility criteria before applying.
The level of funding and support offered by each grant may vary. Startups that receive government funding may also be required to meet certain milestones and reporting requirements. For example, they may need to provide progress updates or demonstrate their achievements in a specific period.
Beyond financial aid, government support extends to non-monetary aid such as mentorship and networking opportunities. This can be extremely valuable for startups, as they can tap into the expertise and resources of experienced entrepreneurs and business leaders.
It’s undeniable that government grants can offer numerous benefits to SMEs. What are these and how can they help your business? Some potential benefits for SMEs include:
Financial support: The most obvious benefit of government grants is the financial support they provide. This can help SMEs overcome financial challenges and fund their growth and innovation initiatives without having to rely on expensive loans or give up equity.
Access to resources and expertise: As mentioned earlier, government grants can also offer non-monetary support such as mentorship and networking opportunities. This can be invaluable for SMEs, especially those that are just starting out and may not have access to a wide network of contacts or experienced advisors.
Validation and credibility: Receiving a government grant is a great validation for an SME’s business idea and potential. It shows that the government believes in their concept and is willing to invest in their success. This can also increase the credibility of the business in the eyes of potential investors and partners.
Increased visibility: Many government grants require businesses to showcase their achievements and progress, which can lead to increased visibility for the SME. This can help attract customers, partners, and even future funding opportunities.
Access to new markets: Some government grants may also provide training or support for entering new markets, both domestically and internationally. This can open up new opportunities for growth and expansion for SMEs.
While other government grants may have specific focuses or eligibility criteria, the Productivity Solutions Grant (PSG) is a comprehensive grant that aims to support businesses of all sizes and industries in their digital transformation efforts. Let’s take a deeper look into PSG and how it can benefit SMEs in their growth journey.
As mentioned, PSG is a grant provided by the Singaporean government to help businesses improve their productivity and efficiency through adopting digital solutions or equipment. It was launched in 2018 and has since helped thousands of SMEs in customer management, digital marketing, sales management and inventory tracking. SMEs can get grant support of up to 50% of qualifying costs on pre-approved solutions. The grant support is offered on a reimbursement basis.
Now that you know what PSG is, the next question would be how to apply for it. Here’s a quick guide on the application process:
Step 1: Identify relevant solutions
The first step is to identify the digital solutions that your business needs. These solutions should be pre-approved by the Infocomm Media Development Authority (IMDA) and listed on the GoBusiness Gov Assist portal.
Step 2: Obtain direct quotations
Once you have browsed through the pre-approved vendor solution, reach out to the vendor directly to request a quotation. Do note that there are no application fees required for schemes offered by EnterpriseSG.
Step 3: Submit your application on the Business Grants Portal (BGP)
After obtaining the quotations, you can proceed to submit your application on the Business Grants Portal (BGP) using your Corppass account. If you do not have a Corppass, you can refer to this Corppass guide to make an account. You will need to provide information such as your business registration number and details of the digital solutions that you are applying for. Check out the PSG Application Checklist to confirm your eligibility and prepare the relevant documents.
Step 4: Claim submission
After submitting your application, you will receive an email notification within two weeks. If your application is approved, you can then proceed to purchase and implement the digital solutions. Once the solution has been implemented for more than 30 days and full payment has been made, you can submit a claim on the BGP for reimbursement.
Step 5: Disbursement of funds
Once your claim has been processed and approved, the funds will be disbursed through PayNow Corporate or GIRO. PayNow Corporate is the faster method with applicants receiving funds within 14 working days of claim approval.
For a comprehensive list of FAQs, you can refer to the Enterprise Singapore PSG page or ask an experienced vendor for advice.
Who is eligible for the PSG grant in Singapore?
Businesses registered and operating in Singapore with a minimum of 30% local shareholding are eligible for the PSG grant. The business must have a Group Annual Sales Turnover below S$100 million or a Group employment size not exceeding 200 employees.
Is Your Company Eligible for PSG?
To know if your company is eligible, you can refer to the PSG Application Checklist.
Is Your Project Eligible?
PSG grants are only applicable for the purchase and implementation of pre-approved solutions. These include both sector-specific solutions that are aligned to industry roadmaps and generic solutions that are designed for all companies to improve productivity.
How many times can I claim a PSG grant?
Each business entity can only claim up to two PSG grants in a financial year, starting from 1st April to 31st March of the following year.
What Level of Support Can I Expect to Receive?
For businesses with a minimum of 30% local shareholding, the PSG grant up to 50% support. This does not include administrative fees, installation fees or GST.
What are the preliminary PSG grant requirements?
Before applying for the PSG grant, businesses must fulfil the following requirements:
Must be registered and operating in Singapore
Have a minimum of 30% local shareholding
Have at least three (3) local employees (Singapore Citizens or Permanent Residents)
Have a clear project scope and objectives
Be financially viable to complete the project
Must not have started on the proposed digital solution before applying for the grant
Meet other eligibility criteria that may vary depending on the specific pre-approved solution chosen.
What Documents Do You Need to Submit for the PSG Application?
To submit a PSG application, businesses will need to provide the following documents:
Completed PSG Application Form
Quotation/Proposals from pre-approved vendors for the digital solutions
Financial statements of the company for the past 2 years (for existing companies)
Business profile registered with ACRA
Other supporting documents as required by specific pre-approved solutions.
How long does it take to get approved for PSG?
Businesses that meet all eligibility criteria and submit complete documents typically receive PSG application approval within 4-6 weeks. However, processing times may vary depending on project complexity and the volume of applications at the time.
How to check your PSG grant status?
Businesses can check the status of their PSG application by logging into the Business Grants Portal using their CorpPass account. You will be able to view the current stage of their application and any updates or notifications from the approving agency.
If you are a first time applicant for the PSG, you may feel overwhelmed by the application process. However, there are various support options available to help businesses make the most out of the grant. For instance, online assistance is available on the Business Grants Portal for businesses to understand the application process and eligibility criteria.
Additionally, businesses can also seek guidance from their respective trade associations or Enterprise Singapore’s SME Centre for advice and assistance in choosing the right pre-approved solution for their needs.
Businesses can claim back their approved grant amount after the project has been completed and the final report has been submitted to the approving agency. This report should include all relevant documents, such as invoices, receipts and details of productivity gains due to the solution.
It is important for businesses to note that they are required to pay for the full cost of the project first before claiming reimbursement from Enterprise Singapore. The reimbursement process may take up to 6 weeks after claim approval, so businesses should plan their finances accordingly.
Growing your business can be a challenging journey, but with the right support and resources, you can achieve success. Research and take your time in finding the right pre-approved solutions that best suit your business needs.
Verz Design is a certified vendor for the eCommerce and Digital Marketing PSG grant in Singapore, with up to 50% grant support. Reach out to us today to build and grow your online presence. Call +65 6841 1680 or email enquiry@verzdesign.com for a free consultation.
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