On 11th March 2020, COVID-19 was declared a global pandemic by The World Health Organisation (WHO). It has taken a big toll on the economy, and many jobs and livelihoods are at stake.
To address these issues, Deputy Prime Minister Heng Swee Keat announced several support schemes last month under the Budget 2020, or “Unity Budget”, to cushion the impact of COVID-19.
However, with recent cases emerging at an exponential rate, the Singapore government has decided to introduce the Supplementary Budget, or the “Resilience” Budget.
The Resilience Budget that amounts to over $48 billion focuses on three main areas to help SMEs, namely cashflow, cost and credit. Here is a list of schemes and programmes for SMEs:
The government has extended a 25% cash grant (up from 8%) to employers on the first $4,600 (up from $3,600) of the gross monthly wages of each local employee (Singapore citizens and permanent residents only) on their CPF payrolls. This is granted for a period of 9 months instead of 3 months to help employers retain their employees.
In particular, the Cash Support seeks to provide additional assistance to the following industries that are badly affected by the virus:
a. Aviation and Tourism Sectors
Under the Enhanced Job Support Scheme, SMEs in the aviation and tourism sectors are entitled to a 75% cash grant on the first $4,600 of the gross monthly wages of each local employee in both sectors on their CPF payrolls.
On top of that, an additional $350m will be set aside for the Enhanced Aviation Support Package to provide cost relief for airlines, ground handlers and cargo companies, while $90m will be put on standby to help the tourism industry recover from this difficult time.
b. Food Services Sector
For SMEs in the food and beverage sector, a cash grant of 50% to employers in this sector will be given on the first $4,600 of the gross monthly wages of each employee on their CPF payrolls.
c. Land Transport Sector
A Special Relief Fund will be made available for taxi hires and private-hire car (PHC) drivers, with payments of $300 per vehicle per month until the end of September 2020. Self-employed drivers are entitled to $1,000 extra a month for 9 months. Private bus owners are also entitled to a 1-year road tax rebate and a 6-month waiver of parking charges at government-managed parking facilities.
d. Arts & Culture Sector
As for the arts and culture sector, a $55m support package will be given to safeguard jobs, and support digitalization and skill enhancement.
To help SMEs reduce costs during this trying period, the government has waived property tax for qualifying commercial properties. It aims to cover more property types such as hotels, serviced apartments, tourist attractions, shops and restaurants. Integrated resorts and non-residential properties can obtain up to 60% and 30% property tax rebate respectively.
Hawker stall owners managed by the National Environment Agency, tenants and non-residential tenants of government agencies are eligible for 3 months, 2 months and 0.5 months rental waiver respectively. On top of that, ALL government fees will be frozen for a year starting from 1st April 2020.
In terms of income taxes, the government has also granted businesses a three-month deferment on income tax payments to ease immediate cash flow concerns. This applies to companies with corporate income tax payments due in April, May and June 2020.
For Credit Support, the government is increasing the loan limits for the respective schemes and programmes:
Aside from cash, credit and cost support, the government has also set up programmes to help SMEs continue their daily operations, and sustain the growth and innovation of companies.
a. Support for Capability Development
The Productivity Solutions Grant (PSG) will be raised to 80% to assist SMEs that are interested in adopting IT solutions and equipment to streamline their business processes. The Enterprise Development Grant is for SMEs that require grants to grow and expand their business. This grant has increased to 80% but may be raised to 90% for severely affected businesses on a case-by-case basis. Both of these enhancements are available to SMEs until the end of 2020.
b. Resilience Building
To foster the spirit of resilience during this time, SG Together Enhancing Enterprise Resilience (STEER) will empower SMEs, trade associations and chambers (TACs) or industry groupings to create proposals with the type of assistance needed to overcome the current challenges faced.
The following information clarifies some of the questions you may have with regard to the credit support programmes rolled out in the Supplementary Budget:
a. Can I borrow more with the increased loan amount?
An increase in the maximum loan quantum of the EFS – Working Capital Loan does not mean that SMEs are automatically qualified to obtain larger loans.
SMEs are still required to apply to participating financial institutions (PFIs) with their own set of credit evaluation criteria.
SMEs that qualify for these loans may then obtain larger loans. However, those that do not qualify will still be unable to obtain the loan, even though the maximum loan quantum has been increased.
b. How much am I eligible to borrow?
The loan amount that you are eligible for is dependent on the essential documents for loan applications and the financier’s credit assessment criteria.
Other than that, it may also depend on other factors (e.g. existing loans that you are servicing).
c. What should I do if I am not eligible for any of the credit support programmes above? Where can I go to obtain a loan?
If you are not eligible for a loan, try to find out the reason for rejection from the financial institution. This will help you with your loan application in the future.
If the rejection is due to over gearing (too many existing loans), it is recommended that you settle your current debts first.
Depending on the financial institution, you may need to wait for up to 1 year before a particular financier considers your loan application again.
Check out Lendingpot.sg now and apply for your business loan with us for free. Have access to over 45 of our partner lenders that comprise banks, non-bank financial institutions, peer-to-peer lenders and private lenders with just 1 application.
To improve your chances of getting a loan, read 3 Quick Tips To Get The $600,000 SME Working Capital Loan and 4 Ways To Improve Chances Of Business Loans.
With COVID-19 cases on the rise every day globally, mounting uncertainties will do doubt ensue. Experts expect it to be a protracted battle that will last for a year or more. It is thus important to manage the resources that you currently have wisely.
Reset or realign your work goals and tasks if needed to ensure that your business is still receiving income through other channels.
Focus more on strengthening relationships with your clients and explore their needs through online meetings to reduce physical contact.
In this time of distress, it is important to stay united as a company and a country. Spread a little love, care and positivity to your clients, your community and the people outside your circle. Be responsible, stay safe and encourage social distancing. With resilience, we can overcome this.
Lendingpot.sg operates a Business Loan Marketplace that allows an SME to connect to multiple lenders with just one application, allowing the SME to know who its prospective lenders are and the rates that they offer, in a very short time.
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Jennifer loves helping SMEs in their business growth journey. She is also an epicurean and has perpetual wanderlust. During the weekend, she weaves poems out of thin air and buries herself in books.
