Why Government Grants are Essential for SMEs in Singapore

Introduction

Small and Medium Enterprises (SMEs) are the backbone of Singapore’s economy, accounting for over 99% of all local enterprises. However, SMEs often face challenges such as limited capital, rising operating costs, digital disruption, and global competition. To support these businesses, the Singapore government offers a wide range of grants and funding schemes.

These grants are not just financial aids—they are strategic tools that empower SMEs to grow, transform, and remain competitive in both local and international markets.

1. Why Government Grants Matter for SMEs

Government grants offer far-reaching benefits that go beyond funding. Here’s why they are especially impactful for SMEs:

a. Reduce Financial Burden

SMEs often operate with tight cash flow and limited access to capital. Grants provide much-needed funding for key projects such as upgrading systems, entering new markets, or hiring staff, without diluting ownership or increasing debt.

b. Accelerate Business Transformation

Digitalisation, automation, and sustainability initiatives are expensive. Grants help SMEs modernise their operations with reduced risk, allowing them to improve productivity and customer experience faster.

c. Promote Innovation

Many grant schemes support R&D, product development, and prototyping. This allows SMEs to test new ideas and pivot without bearing the full financial risk.

d. Encourage International Expansion

For SMEs looking to go regional or global, grants make it financially viable to explore new markets, attend trade shows, set up overseas offices, or conduct in-market research.

e. Support Workforce Development

With government co-funding, SMEs can invest in hiring, training, and retaining skilled workers, critical for scaling up sustainably.

2. Five Key Grants SMEs Should Know About

Here are five government grants in Singapore that are highly beneficial to SMEs across various growth stages:

1. Enterprise Development Grant (EDG)

Purpose: The Enterprise Development Grant (EDG) supports Singapore companies in undertaking projects that help them grow, innovate, and compete locally and internationally. It targets businesses looking to upgrade operations, improve efficiency, or expand overseas.

Coverage: Up to 50% of qualifying project costs, including third-party consultancy, software, and equipment costs. For sustainability-related projects, support can go up to 70%, valid from 1 April 2023 to 31 March 2026.

Focus Areas:

• Core Capabilities: Strategy development, branding, financial management, HR, and service excellence.

• Innovation and Productivity: Process redesign, automation, product development, and business model innovation.

• Market Access: Overseas market setup, participation in trade fairs, and marketing expansion strategies.

Ideal For: SMEs that are serious about long-term transformation, entering new markets, or adopting advanced technology.

2. Productivity Solutions Grant (PSG)

Purpose: The Productivity Solutions Grant (PSG) helps SMEs adopt pre-approved digital and productivity-enhancing solutions to improve efficiency and scale operations quickly.

Coverage: Up to 50% of eligible costs, capped at S$30,000 per company per financial year. This includes expenses for software subscriptions, hardware, and training.

Common Tools Supported:

• Accounting and payroll software

• Customer Relationship Management (CRM) systems

• E-commerce platforms

• HR management systems

• Cybersecurity tools

• Equipment for retail, food services, and logistics

Best For: SMEs that want to digitalise operations or adopt automation tools without a large upfront investment.

3. Market Readiness Assistance (MRA) Grant

Purpose: The MRA grant supports Singapore-based SMEs in venturing into overseas markets. It helps reduce the cost of establishing and promoting your brand abroad.

Coverage: Up to 50% of eligible costs, capped at S$100,000 per new market per fiscal year, broken down into:

• S$20,000 for overseas marketing and promotion

• S$30,000 for overseas business development

• S$50,000 for market setup, including legal, tax, and in-market incorporation fees

Examples of Eligible Activities:

• Participating in international trade fairs and marketing campaigns

• Engaging overseas business development consultants

• Setting up a local entity, office, or website in a new target market

Best For: SMEs planning to expand regionally or globally with limited in-house international experience.

4. Career Conversion Programmes (CCPs)

CCPs help companies reskill and redeploy mid-career hires or existing employees into new or redesigned roles, particularly in high-growth or transformation-driven industries.

Coverage: Up to 90% salary support and training subsidies for the training duration (typically 3 to 6 months), depending on the scheme and the employee's profile.

Types of CCPs:

• Place-and-Train: Hired first, then trained.

• Attach-and-Train: Trained before hiring (common in talent-scarce sectors).

• Redeployment/Job Redesign: For upskilling existing staff into new business functions.

Best For: SMEs facing talent shortages or undergoing business transformation, needing skilled workers in tech, logistics, healthcare, finance, or digital roles.

5. SkillsFuture Enterprise Credit (SFEC)

The SFEC encourages employers to invest in enterprise and workforce transformation through a one-off S$10,000 credit that co-funds eligible productivity and training initiatives.

Coverage: The credit supports up to 90% of out-of-pocket expenses (after other government grants) for:

• Enterprise Development Grant (EDG) projects

• Productivity Solutions Grant (PSG) solutions

• Job redesign under the WorkPro initiative

• Workforce training under SkillsFuture

Eligibility: Employers must have paid at least S$750 in Skills Development Levy (SDL) in a qualifying period and have at least 3 local employees.

Best For: SMEs that are undertaking both operational upgrades and employee training.

Conclusion

Singapore’s government has built one of the most comprehensive and SME-friendly grant ecosystems in the world. These grants are not handouts—they are strategic enablers that help small businesses scale, transform, and compete globally.

From upgrading operations to expanding abroad or developing your workforce, government grants reduce the financial load and de-risk bold business decisions. For SMEs looking to build sustainable growth in a competitive landscape, leveraging these grants is not just a smart move—it’s a necessary one.

If you're unsure which grant best suits your business goals Or if you need help navigating the application process, ProLead is here to assist. Contact us today for a consultation tailored to your business needs.