Enterprise Singapore (ESG) is a government agency that champions enterprise development and works with committed companies to build capabilities and continuously innovate. Being involved in the growth and internationalization of Singapore-based enterprises, its main objective is to help enterprises enhance their capabilities to be more competitive and eventually expand abroad, encouraging them to adopt the latest technology and developing strong leadership to correctly drive their growth.
ESG proposes several initiatives and programs to enterprises; however, we will focus only on two of them:
The enterprise financing scheme – Project Loan (EFS-PL)
The Enterprise Financing Scheme – Project Loan finances the fulfillment of secured overseas projects. There are multiple supportable loans, including:
- Working capital loan
- Factory/ Building/ Land (including Purchase/ Renovation/ Construction)
- Equipment/ Machineries/ Vessels/ Other Fixed Assets/ Machinery Hire Purchase
- Guarantees
The maximum loan is S$50 million per borrower for overseas projects and S$30 million per borrower in case of a domestic project: the amount of the latter will have a 50% reduction (S$15 million) from the 1st of April 2024 to the 31st of March 2025. The borrowers, which are subject to the same limits in the borrower group, have a repayment period of up to 15 years, requiring an underlying contract, secured sales order, or specific project tie-in.
ESG will bear 50% of the overall risk with financial institutions, a percentage that can be increased to 70% in case young enterprises or enterprises operating in a challenging market. Borrowers are still considered responsible for the overall repayment of the loan amount, and, in case of default, the participating financial institutions will follow their standard commercial recovery procedure, including the realization of security before claiming the unrecovered amount from EnterpriseSG based on the risk share. The financial institutions are also involved in the assessment of the interest rates, considering the level of risk involved.
The eligibility terms for this initiative are the following:
- Business Registration: must be a business entity registered and operating in Singapore.
- Eligible Entities: ACRA-registered Sole Proprietorships, Partnerships, Limited Liability Partnerships, and Companies.
- Loan Approval: subject to the assessment of the participating Financial Institution.
- Ownership Requirements: at least 30% local equity held by Singaporeans and/or Singapore Permanent Residents, determined by ultimate individual ownership.
- Financial Threshold: Group Annual Sales Turnover must not exceed S$500 million.
- Industry-Specific Eligibility: enterprises with SSIC codes starting with 41, 42, or 43 can apply for the enhanced EFS-PL for domestic projects.
- Usage of Funds:
- For acquiring fixed assets to discharge a contractual obligation under a project
- Must be tied to secured sales orders and/or projects, not for general working capital or operating expenses.
Market Readiness Assistance (MRA) Grant
The Market Readiness Assistance (MRA) Grant provides financial support of up to S$100,000 per company (per new market) to help cover 50% of the costs for companies expanding into new overseas markets. This amount will be split into the following activities:
- Overseas marketing promotions (capped at S$20,000): includes Overseas Marketing & PR, and Overseas Physical & Virtual Trade Fair.
- Overseas business development (capped at S$50,000): includes identification of Potential Overseas Partners, In-Market Business Development, and Overseas Marketing Presence.
- Overseas market set-up (capped at S$30,000): includes Market Entry and FTA & Trade Compliance Consultancy.
Each application is limited to one activity in a single overseas market and must be made by a single company (group applications are not allowed) no more than 6 months before the project’s start date. Each project shall not exceed 12 months.
In terms of eligibility for the MRA Grant, the company must meet the following criteria:
- Business Registration: must be a business entity registered and operating in Singapore.
- Ownership Requirements: at least 30% local equity held by Singaporeans and/or Singapore Permanent Residents, determined by ultimate individual ownership.
- Target overseas: the company’s annual sales in the target market must not have exceeded S$100,000 in any of the preceding three years.
- Size: the company must have a Group Annual Sales Turnover of no more than S$100 million or a Group employment size of no more than 200 employees.
Case study
Secretlab, a Singaporean gaming chair company, utilized the Market Readiness Assistance (MRA) Grant to expand into new markets, including Malaysia and Australia. The grant helped them connect with local partners, understand market regulations, and subsidize expansion costs. This support facilitated their successful entry into these international markets.
In conclusion, the EFS-PL and the MRA Grant are both designed to support the growth and expansion of Singaporean companies However, they serve different purposes and offer distinct types of support in terms of activities and financial aid. Also, the EFS-PL has more stringent eligibility criteria compared to the MRA Grant and includes a risk sharing component with financial institutions for a more structured framework.
