Declining growth, rising uncertainty. Just two of the ways that COVID-19 is impacting supply chains and consumer demand the world over. For SMEs in Singapore, help’s at hand.
With the repercussions of COVID-19 sure to be long-lasting for the global economy, some governments are moving swiftly to support their local businesses and SMEs.
Take Singapore, for instance.
In less than two months, the Singapore Government has released three budget statements to help businesses through these unprecedented times. The values of these measures? Almost $60 billion—around 12% of the Lion City’s GDP.
Until now, three budgets in less than two months was unheard of in Singapore. But these are no ordinary times. So much so, that the Singapore Government has a $60 billion war chest to fight COVID-19.
Designed to protect jobs, help enterprises, and support families, the money is comprised of:
For the full budget statements, including key take-outs and videos, click on the above links. Alternatively, here’s a quick recap of how each of the three budgets is designed to support SMEs.
On April 7, 2020, a series of month-long ‘circuit-breaking’ COVID-19 measures came into force. In short, everyone in Singapore has been asked to stay in and only go for out for essential services, like groceries and medical assistance, until May 4, 2020.
To help businesses during this period, the Solidarity Budget announced additional help with labor and rental costs, as well as other financial support. This includes:
Support for labor - Part of the Unity Budget, the Jobs Support Scheme will give employers 75% of the first $4,600 April wage per local employee . Thereafter, rates vary by sector, until December 2020. In addition, the Foreign Work Levy for April will be waived, and employers can apply for a rebate of S$750 for each of their foreign workers.
Support for rental – In April, businesses can defer certain contractual obligations, such as rent, repaying loans, and completing work. However, all property tax rebates must be passed on in full, to tenants.
Support for financing – For the temporary bridging loans and financing schemes announced in the Unity Budget, the government’s liability share is now up from 80% to 90% for loans made from now until 31 March 2021. And to help SMEs with cash flow, the Monetary Authority of Singapore (MAS), together with the financial industry, has introduced the following:
Please note: These financing options are opt-in. If you need financial support, don’t delay. Apply today.
We will stand with our workers and businesses, to ride through this economic storm together, and overcome this challenge to our growth and prosperity.”
— Heng Swee Keat, Singapore Deputy Prime Minister, Resilience Budget 2020
When it comes to material things, there’s a quaint phrase that’s widely used in Singapore. The five Cs–standing for cash, car, credit card, condominium, and country club membership.
Back in March, however, the Singapore government were focused on three different Cs. Ones that were very much on the minds of local business owners–namely, cash flow, costs, and credit.
As part of the Resilience Budget, help was given in the following areas:
Cash flow – Payouts under various wage support schemes were accelerated. In addition, income tax payments for companies and the self-employed were automatically deferred for three months, no application required.
Costs – The Property Tax Rebate from the Unity Budget was enhanced. As well as no 2020 property tax for qualifying commercial properties, there was a 30% tax rebate for businesses in other non-residential properties, and rental waivers to support tenants.
Credit - Financing schemes from the Unity Budget were enhanced, enabling hardest-hit businesses to have access to credit from 8 April 2020 to 31 March 2021. These included:
Back in February, against the backdrop of the initial outbreak of COVID-19 and an unsure economic landscape, Singapore’ Deputy Prime Minister was very much on the ball.
Speaking to Parliament, Heng Swee Keat said, “This year, we usher in a new decade. One marked by tectonic shifts in our operating environment and major uncertainties.”
As part of Budget 2020, now known as the Unity Budget, a number of business support measures were introduced. They focused on two key areas:
Stabilisation and support — The Jobs Support Scheme was launched to help employers retain their local employees, the SME Working Capital Loan offered additional funding until March 2021, and there was a 25% corporate income tax rebate for 2020, up to $15,000 per company
Transformation and growth — With increased funding for deep-tech startups through StartUp SG Equity, as well as the Expanded SMEs Go Digital programme to drive greater adoption of digital technology.
Banks in Singapore are also stepping in to help SMEs. This week, we look at how DBS is helping its own customers. This includes:
Principal Moratorium on Secured Term Loans — DBS customers can now defer loan repayments until 31 December 2020, and extend loan tenures. For more information, call DBS Business Care at 1800 222 2200 or visit this link.
Digital Business Loan — Small, hassle-free loans can be a lifeline to many businesses. Now, you can access up to $100,000 as part of the new relief assistance with the Digital Business Loan, supported by the Resilience Budget 2020. For more information, click here.
F&B Digital Relief Package — DBS SME customers in the F&B can now create new online revenue streams by having an online presence, e-commerce or digital marketing. For more information, visit here.
Here at QuickBooks Commerce, we are committed to keeping our customers fully in the picture. We will therefore send you regular updates and the latest announcements that could affect SMEs. By working together, we will get through this crisis, for sure.
Meanwhile, take care and stay safe.
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