Fortitude Budget: S$285m to help promising startups access credit, S$500m to help businesses digitalise
Deputy Prime Minister Heng Swee Keat said in Parliament on Tuesday (May 26) that he has received feedback that startups have found it difficult to raise capital and develop their business amid the pandemic, despite enhanced credit support rolled out in the previous three budgets this year.
SINGAPORE — To support "promising" startups financially, the Government will be setting aside another S$285 million to help them gain access to much-needed credit, Deputy Prime Minister Heng Swee Keat said on Tuesday (May 26).
This will allow them to bridge a financing gap amid the Covid-19 pandemic, which if left unaddressed, could “set back our efforts and result in the loss of good jobs and good companies”, said Mr Heng, who announced this measure as part of a S$33 billion Fortitude Budget in Parliament.
Mr Heng, who is also Finance Minister, said he has received feedback that startups have found it difficult to raise capital and develop their business amid the pandemic, despite enhanced credit support rolled out in the previous three Budgets this year.
Through previously announced government programmes and various enhanced financing schemes for these firms, around S$4.5 billion of loans benefitting 5,000 businesses have been given out so far — three times that for the whole of 2019, he said.
And this amount comes on top of relief measures offered by other entities, such as a joint relief effort by the Monetary Authority of Singapore, banks, finance companies and insurers, to help individuals and small and medium-sized enterprises to continue servicing their loans and pay for insurance coverage.
Said Mr Heng: “It is important to preserve what has been built up in our innovation ecosystem so painstakingly over the years.”
The additional S$285 million set aside by the Government will be used to match private investments for promising startups, to help them sustain their innovation and entrepreneurship activities, he added.
In response to queries, the Ministry of Finance said startups will be assessed by EDBI and SEEDS Capital — the respective investment arms of the Singapore Economic Development Board and trade agency Enterprise Singapore — on a case-by-case basis, and “must meet certain criteria to be eligible to receive investments under the scheme”.
Startups can contact EDBI and SEEDS Capital for more details, the ministry added.
Enterprise Singapore told TODAY that the startups should be incorporated as private-limited companies with key value-added activities in Singapore. They should also have strategic capabilities, such as technology and innovation competencies as well as sustainable competitive advantages.
Mr Heng said that sector-specific support will also be given to firms within the construction sector.
In light of the outbreak of the disease among foreign workers in the construction sector, stringent requirements had been put in place to allow construction businesses to resume.
The Government will thus provide support to co-share the additional costs incurred by companies to put in place these additional measures to resume work safely, said Mr Heng.
More details will be announced by National Development Minister Lawrence Wong and the Building and Construction Authority later, he said.
Such support had previously been extended to sectors that were badly hit by the pandemic, such as the aviation, tourism, land transport, arts and culture, financial and maritime sectors.
DIGITAL TRANSFORMATION
Aside from the near-term measures for firms, Mr Heng said Singapore must “think ahead” to save jobs and build viable businesses for the future.
Referring to the Emerging Stronger task force chaired by Social and Family Development Minister Desmond Lee, Mr Heng said the Government is studying shifts in the rise of digital transformation and the declining support for globalisation.
“These shifts were already taking place, but Covid-19 has accelerated them. Our businesses must adapt, and we will support them in this,” said Mr Heng.
To support businesses as they digitalise amid the health crisis, Mr Heng said the Government will inject S$500 million to support them in their transformation efforts.
This will be used to aid stallholders in hawker centres, wet markets, coffee shops and industrial canteens to adopt e-payment systems so that they can avoid having to handle cash. The funds will be used to provide them with a S$300 monthly bonus over five months.
Eligible businesses can receive a payout of up to S$5,000 if they adopt PayNow Corporate and e-invoicing, as well as business process or e-commerce solutions, under a new Digital Resilience Bonus scheme to help firms digitalise.
Food and beverage and retail businesses that incorporate “advanced solutions” can also receive an additional bonus of S$5,000.
Another S$250 million will be set aside to help businesses digitalise “in partnership with platform solution providers and industry champions”, Mr Heng said.
These are platforms that help with the development of “offline-to-online” business models to access new domestic revenue streams and international demand, he said, though he did not name the partnering platforms that would allow firms to qualify for this additional scheme.
In addition, Mr Heng announced a set of national innovation challenges to enable new partnerships between businesses as they transform digitally. For a start, the challenge will look at solutions that will help Singapore restart safely during and after the pandemic.
“With the national innovation challenges, we will focus on partnerships to develop industry-led solutions to the challenges that all businesses are grappling with: Starting with how we can reopen Singapore safely — to achieve safe workplaces, safe homes, safe schools, and safe commuting,” said Mr Heng.
Mr Heng also stressed the importance of institutes of higher learning making use of digital technologies for learning, noting how the Education Ministry’s digital Student Learning Space has enabled teachers to conduct home-based learning during the circuit breaker period.
The Education Ministry and the National Research Foundation will provide more details on the plans to develop digital platforms for online learning and teaching with the use of artificial intelligence and learning sciences, he said. ADDITIONAL REPORTING BY NAVENE ELANGOVAN
