It aims to strengthen support for local businesses’ overseas expansion.
The Singapore government will introduce changes to its Enterprise Financing Scheme (EFS) as part of its efforts to assist businesses in their overseas expansion. EFS brings Enterprise Singapore’s (ESG) financing schemes under a common umbrella scheme.
According to senior minister for trade and industry Chee Hong Tat, ESG will raise the maximum insurance cover for overseas project financing under EFS to $50m, and increase the maximum tenure to 15 years.
To support companies that are internationalising via mergers and acquisitions (M&A), the scheme will provide a higher maximum loan cover of $50m for such projects to allow companies to quickly build new capabilities and expand overseas.
“The government will support a higher risk-share for loans to young enterprises under EFS, for both domestic and international projects. We will also provide a higher risk-share for enterprises venturing into challenging markets, as they do face higher hurdles in obtaining financing,” Chee added.
In 2018, seven in 10 Singapore businesses surveyed by the Singapore Business Federation have activities in overseas markets. “For companies that have internationalised, overseas revenue forms nearly half of their total revenue, and has grown more quickly than local revenue,” the minister said.
ESG supported over 570 internationalisation-related projects in 2018, a 25% increase compared to 2017. “Last year, ESG added eight new partners to its Plug & Play Network, which has recently expanded to two new countries, UAE and Cambodia,” Chee said.
In response to parliament member Cheryl Chan, Chee said the Scale-up SG Programme will also provide tailored support to nurture local enterprises. For instance, the minister cited how the scheme could help a healthcare services company with overseas operations through targeted support to develop a commercially viable product prototype, as well as to shortlist and validate acquisition targets.
“Through this programme, we will help enterprises develop and implement long-term plans tailored to their specific growth priorities, in areas such as innovation and international expansion,” he added.
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