ANNEX A-2: ENHANCEMENTS TO SUPPORT ENTERPRISES AND INDUSTRIES

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1 ANNEX A-2: ENHANCEMENTS TO SUPPORT ENTERPRISES AND INDUSTRIES (A) SME Working Capital Loan To support viable SMEs that may have cash flow concerns during this period of slow growth, SPRING will introduce a SME Working Capital Loan for an initial period of three years. The SME Working Capital Loan will provide loans of up to $300,000 for local SMEs. The Government will co-share 50% of the default risk of these loans with participating financial institutions (PFIs). Use of Funds Maximum Loan Quantum Interest Rate For daily operations or for automation and upgrading of factory and equipment $300,000 Subject to PFIs assessment of risk involved Businesses may apply for a SME Working Capital Loan if they meet these criteria: Registered in Singapore Have at least 30% local shareholding; and Company s group annual sales of not more than $100 million OR company s group employment size of not more than 200.

2 (B) Automation Support Package To support firms to scale-up their automation efforts, SPRING will introduce an Automation Support Package comprising four components: Support under SPRING s Capability Development Grant (CDG) SPRING s CDG will be expanded to support the roll-out or scaling up of automation projects at up to 50% of the qualifying cost. The grant is capped at $1 million. Investment Allowance (IA) Qualifying projects may be eligible for an Investment Allowance (IA) of 100% on the amount of approved capital expenditure, net of grants. This IA is in addition to the existing capital allowance for plant and machinery. The approved capital expenditure is capped at $10 million per project. Enhanced financing support To improve access to loans for qualifying projects, the government will increase the risk-share with PFIs under SPRING s Local Enterprise Finance Scheme (LEFS) equipment loan, from 50% to 70% for qualifying projects undertaken by SMEs. We will also expand LEFS to cover equipment loans for non-smes at 50% risk-share with PFIs. Access to overseas markets IE Singapore will work with SPRING where relevant to help businesses to access overseas markets.

3 (C) SME Mezzanine Growth Fund The SME Mezzanine Growth Fund (MGF) was launched in Budget 2014 under Phase II of the Co-Investment Programme (CIP) to provide mezzanine capital to qualifying investee companies. The companies must have their key management and headquarter functions in Singapore. In order to better support smaller SMEs, the Government will be expanding the SME MGF. The changes to the SME MGF are as follows: Increase in fund size to $150 million The MGF is currently sized at $100 million. The Government will increase the fund size to $150 million by providing additional funding of up to $25 million, to match new private sector investment on a 1:1 basis. Expanded mandate with new funding dedicated to smaller SMEs This new funding will be dedicated to smaller SMEs with annual revenues of $50 million and below at the time of investment.

4 (D) Local Enterprise and Association Development-Plus (LEAD-Plus) Programme To strengthen the capabilities of Trade Associations and Chambers (TACs), SPRING will introduce a new LEAD-Plus programme to support TACs in attracting talent, developing their capabilities, and strengthening their processes and services. The LEAD-Plus programme will provide funding support for TACs to raise their competencies. To forge closer partnerships and enable public officers to better understand enterprises needs, up to 20 public officers will also be seconded to interested TACs over five years as part of this programme.

5 (E) More information For details on the SME Working Capital Loan, Automation Support Package, and LEAD-Plus Programme, please visit the SPRING website ( For details on the SME Mezzanine Growth Fund, please contact Heliconia at