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Singapore Budget 2014 – Why Now is the Best Time to Run Your Own Business

Companies stand only to gain from the Singapore Budget 2014. The pro-business Singapore government will be catalysing investment “for companies at various stages of growth so that they can take full advantage of growth opportunities.”

The SME Co-Investment Programme (CIP) which was first launched in 2010 to enable SMEs to achieve sufficient scale and become competitive, will be entering its second phase this year.

In the first phase, the government had set aside $250 million, of which about $160 million was deployed, catalysing over $500 million of investments from the private sector players, giving SMEs a huge boost.

For the second phase later this year, the government will provide an additional $150 million to match private sector investments to help SMEs.

The Micro-Loan Programme will be enhanced as the government acknowledges that young SMEs often face initial financing challenges. Without a track record and being a new venture, SMEs are considered more risky investments, which makes it challenging to obtain bank loans.

The Singapore government will be taking on more risk to spur lending to young SMEs. Hence, SPRING Singapore will increase the government risk-share in the Micro-Loan Programme for young firms which are less than three years old, from 50% to 70%. For 2014 and 2015, this enhancement is expected to catalyse an additional $32 million in loans.

To add to why now is the best time to run your own business, the Productivity and Innovation Credit (PIC) scheme has been extended to YA2018, where businesses can benefit from a 60% cash payout rate of up to $60,000 a year from PIC’s six qualifying activities as well as attractive tax rebates. Read more about PIC extension and enhancements here.

 

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