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SINGAPORE – Businesses looking to grow their businesses, increase productivity or expand abroad will soon be able to take advantage of larger grants and expanded loan schemes.
These moves will further support businesses during the Covid-19 pandemic and help them transform, said Commerce and Industry Minister Chan Chun Sing, announcing improvements to various grant and loan schemes on Monday (Oct 12). .
BIG GRANTS, EXPANDED LOAN SYSTEMS
Businesses looking to go international will be able to have up to 80 percent of qualification costs covered from November 1 to September 30 of next year, compared to 70 percent today, under the Market Readiness Assistance Grant.
The scope of the grant’s coverage will also be expanded to cover participation in virtual trade shows to encourage companies to find new opportunities abroad through such platforms, Chan said during a virtual press conference.
Retailers, in particular, would do well to expand their reach abroad, as the Covid-19 pandemic has accelerated the growth of online shopping and opened up new opportunities, he said.
The highest level of support currently available for companies looking to pivot, grow and digitize will also be available for an additional nine months starting January 1.
The Business Development Grant and the Productivity Solutions Grant will cover up to 80 percent of qualification costs through September 30 of next year, after which it will cover up to 70 percent.
More help will also be available for businesses seeking loans.
As of January 1 of next year, construction companies can apply for loans to finance the fulfillment of national projects guaranteed with at least half of the risk shared by the Government.
This temporary adjustment to the Business Financing Scheme – Project Loan, which currently only covers projects abroad, will end on March 30, 2022.
The Temporary Bridging Loan Program, which provides access to working capital at a lower interest rate, and a financing scheme for commercial loans will also run for six months until September 30 of next year.
However, in both schemes, the government’s share of risk will be reduced from 90% to 70% from April 1. The maximum loan amount for the bridge loan program will also be reduced from $ 5 million to $ 3 million.
These schemes are no longer trying to help companies overcome the current crisis, but to help them adapt to the new reality, Chan said.
BUMPY LANE TOWARDS RECOVERY FOR THE RETAIL SECTOR
The retail sector faces a bumpy road to recovery, Chan said after a visit to SK Jewelery headquarters in Changi Business Park.
He noted that the sector had already faced structural challenges before the pandemic hit, such as the rise of e-commerce and the lack of innovative concepts and experiences.
The outbreak has dealt another blow, he said, and retail sales suffered an unprecedented 52.1% year-on-year drop in May, when stores were forced to close.
While sales have rebounded since the stores were allowed to reopen, collections were still down 5.7 percent year-on-year in August.
Cyclical forces will continue to affect the retail industry as consumer confidence declines and their purchasing power is limited, he said, outlining three ways that retailers can transform to survive.
First, they will need to adapt to new consumer behaviors and create unique selling propositions, he said.
Citing SK Jewelery as a retailer that has been successful in this regard, he noted that its line of lab-grown diamonds, launched last year, is aimed at younger consumers who are increasingly aware of the environmental and social impact of their decisions shopping.
Retailers also cannot rely solely on domestic sales, Chan said. They should take advantage of programs like the Grow Digital Initiative to expand abroad without the need for a physical presence, he urged.
Lastly, retailers must create value through intangibles like service and design to help differentiate their brands, Chan said.
The retail sector contributes around 1.6 percent of Singapore’s gross domestic product and employs 4.1 percent of the workforce.
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