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SMEs have to be prepared to pursue overseas opportunities.

This story is sponsored by Standard Chartered Bank (Singapore) Limited (“SCBSL”).

When IT solutions provider EPS Computer Systems (EPS) looked to expand overseas, specifically into high-growth ASEAN countries like the Philippines and Thailand, one of their first priorities was to look into government grants that would help them enter lucrative new markets while mitigating business risks. Not only did the company face significant upfront costs, but they also had to navigate wildly differing operating landscapes across multiple countries. This led CEO Mr Kevin Liang to tap into government grants and initiatives, as well as Standard Chartered’s Business Working Capital (BWC) loan to increase cashflow critical for such bold overseas expansion plans.

Government grants and initiatives play an important role in supporting the global ambitions of SMEs, which are viewed as the key to Singapore’s long-term prosperity and contribute more than 50% of economic output and 70% of employment in the country. As the government continues to urge SMEs to invest in skills upgrading, new technologies and innovative processes to constantly boost their performance, it has also introduced several grants and initiatives to make SMEs globally competitive and prepared to pursue opportunities beyond Singapore’s shores.

Market Readiness Assistance (MRA) Grant

To assess if the company was prepared for entry into the Philippines and Thailand, EPS first applied for the MRA Grant from International Enterprise (IE) Singapore and received funding support for its overseas market set-up activities.

MRA grant, capped at S$20,000 per company per fiscal year, can support up to 50% (From 1 April 2015 to 31 March 2018, SMEs get up to 70% funding support) of eligible third-party costs for activities such as overseas market set-up, identification of business partners, and overseas market promotion.

Through the MRA grant, EPS gained a deeper understanding of its readiness to enter a new Southeast Asian market, received recommendations on the best modes of entry, and became aware of possible complications and issues it could encounter. The grant also enabled the company to incorporate in both the Philippines and Thailand.

Global Company Partnership (GCP) Grant

The next grant EPS applied for was the GCP grant from IE Singapore and the company leveraged this grant to venture into the Philippines. The grant helped EPS establish its overseas marketing presence in a new market. Aside from market access activities, the GCP grant also covers up to 50% of eligible third-party costs (From 1 April 2015 to 31 March 2018, SMEs get up to 70% funding support) for capability building and manpower development activities, both of which are critical to sustaining overseas growth in the long-term.

Capability Development Grant (CDG)

There are other grants apart from the MRA and GCP grants that Singaporean SMEs can consider, depending on the kind of assistance they require when expanding overseas. The CDG, for example, helps to support SMEs across 10 key business areas, ranging from product development, business model transformation, human capital development and financial management. The grant defrays up to 70% (till 31 March 2018) of qualifying project costs such as consultancy, training, certification and equipment costs.

SMEs Go Digital

Digital technology has the unique potential to transform businesses, large and small, across the economy. The SMEs Go Digital programme aims to help SMEs by providing an all-rounded support for them to adopt digital solutions, achieve sustainable growth and be more competitive in the digital economy.

In addition to supporting SMEs in the use of productivity tools, the programme also serves to enable SMEs with the adequate digital capabilities such as cybersecurity, data protection and data analytics to attain internal efficiencies, embrace innovation, and scale up operations.

There are three components under the SMEs Go Digital programme:

1. First, SMEs can receive step-by-step guidance on the technologies to adopt at each stage of their growth through sectoral Industry Digital Plans, which are aligned to the national Industry Transformation Maps. The first Industry Digital Plan will be available towards the end of 2017.
2. Second, SMEs can get in-person advice on more advanced or sophisticated solutions at the SME Digital Tech Hub, which is slated to be launched by the end third quarter 2017.
3. Third, progressive SMEs who are open to apply emerging technology that are new to their sector can get funding support of up to 70% subsidy, capped at $300,000 per SME for pre-qualified emerging solutions. The funding cap may be reviewed on a case-by-case basis if more support is required. SMEs can approach any of the SME Centres to start their digital journey today.

Complementing government support with working capital

These are just four initiatives out of many others targeted at strengthening the capabilities of SMEs and reducing the risks when entering new markets. Aside from taking advantage of robust government initiatives, SMEs are also exploring taking loans from banks to fuel their international growth.

Standard Chartered, in particular, has developed an array of BWC offerings tailor-made for the needs of SMEs with global aspirations, be it to enter exciting new markets or to bolster business capabilities to world-class standards.

Standard Chartered’s BWC is a flexible bundle of working capital, trade finance and foreign exchange (FX) hedging facilities delivered in a simple fashion to SMEs. The bank recognizes that every SME is built differently so it works with each SME to build a customised BWC solution easing the capital constraints that prevent promising SMEs to go global.

While government grants provide valuable financial support, Standard Chartered’s BWC provides larger pools of capital with credit facilities of up to US$4 million and an additional US$0.5 million to cover SMEs’ FX hedging necessities upon approval. Timely access to funds is of the essence for SMEs that are growing fast and want to quickly take advantage of overseas opportunities, hence the simple and hassle-free application process of Standard Chartered’s BWC cuts down on unnecessary paperwork. If you’re looking to expand your business beyond our shores, visit Standard Chartered’s Business Working Capital page to find out more.

With support from both the government and banks such as Standard Chartered, there are more options than ever for local SMEs to enhance their capabilities and access the necessary capital to transform into global powerhouses.

This article is for information purposes only. All loan applications are subject to SCBSL’s loan approval process at its sole discretion. Visit Standard Chartered’s Business Working Capital page for more information. The views and opinions expressed are the author’s own and Standard Chartered accepts no liability for any of the contents, views or opinions expressed by the author of the article.

The information provided in this article is accurate as of 1 June 2017. For more information and full details, please refer to the following sites: MRA and GCP from IE Singapore, CDG from SPRING Singapore, and SMEs Go Digital from IMDA.

This article first appeared on sbr.com.sg on 20 June 2017