Singapore Calling for E-commerce Business- Guide to Obtaining Funds and Government Assistance

Funds are the lifeline of any business. They help the business at every stage, right from initialization (actually even before business starts formally) till the time it stays in the market. Everything is dependent upon funds- growth, sustainability, customer’s retention and financial trust of institutions too! With lot of avenues opening up for e-commerce lines of business, it is relevant to understand types of schemes available for grants related to e-commerce business! What are the sources through which you can borrow funds and take your e-commerce business to amazing heights?

Singapore is a great place to lay down foundation of your business and with internet industry expanding in almost every part of the world; it becomes feasible to expand your roots around the globe. Singapore ministry is keen on making this place as e-commerce hub so that people invest more here and can contribute to GDP. Hence, they have taken lot of initiatives to encourage investment by offering various incentives and assistance programs to local entrepreneurs. E-commerce business also requires lots of funds for development of website, website maintenance, domain registration, web hosting, dynamic software, inventory management and much more. Thus arranging funds from a reliable and continuous source is rewarding in long run. Here are some of the modes from where you can obtain funding and financial assistance.

Business Loans:

Business LoansThe most common and reliable source is debt financing. There are lot of lenders which provide loans for new ventures and start-ups. The good part about these kinds of loans is that they are easily available and accessible. You have to submit your project plan and fill up loan application and banks evaluate the net worth of the business and then grants you loan. Another beneficial point is you don’t have to dilute your ownership. These loans are mere liabilities which you have to pay off in certain time span. You can convert them into easy instalments and even avail benefits of tax on interest expense. However, the unfortunate part is that these loans are secured liabilities and hence in case you are unable to pay them off, you have to sell your assets. These loans can be obtained from family and friends or from banks or financial institutions.

Venture Funding:

The funders of venture funding are investors who are interested in your business. They are not normal lenders who are just interested in lending out money and venting out huge interests. They evaluate your business on their own terms and then grade you as per scale of business and innovation of the idea. On that basis, they decide the eligibility of loan amount. They have their pre-defined means and methods of measuring the future profitability and sustainability of the business idea and on the basis of this they grant you loan. The limitation of this method is you have to dilute your ownership as they are not the typical lenders but the investors and they want stake in profitability. But the good part is that if your idea fails then you don’t have any loan burden on your shoulders. Generally the start-ups prefer venture funding because they get to know the worth of their business in the market and can save claim on their personal assets and liabilities. This mode is also known as equity funding and Singapore Government encourages these kinds of ventures for the betterment of businesses.

Assistance Schemes by Government:

As previously mentioned, Singapore Government is inclined towards making this place known for something else than tourism. E-commerce merchants are expanding in Singapore with the help of various schemes offered by Government. Apart from attractive tax and cost incentives, Government is also conducting various sessions and town halls for spreading the information about these incentives. Here are some of those:

Certification Grant Scheme<:

ISO 27001 is an international standard for the quality evaluation of the company. A brand which is certified by ISO 27001 is assumed to be best in quality. But it is not very affordable to get this certification as huge cost is involved at initial stage. Singapore Government is offering a grant of 50% on this certification cost with a maximum cap of $20000. This will help the e-commerce merchants in obtaining this certification and thus attract more number of customers.

Collaborative Industry Projects:

This scheme as the name suggests was launched to devise solutions for the common challenges that are faced by Small and medium enterprises. There are many industry wide challenges including regulations, development costs and knowledge about local resources. This common panel is there to evaluate all those techniques which can help everybody on the panel i.e., the industry peers. It includes options for betterment of utilization of resources, streamlining work processes and exploring new business opportunities. This panel also promotes industry wide and cross sector collaborations and thus help you in availing benefit of bulk. All those SMEs which are part of this panel are funded or reimbursed of 70 percent of qualifying development or absorption costs. This was launched in 2013 but is gradually getting stronger and embraced by merchants. This scheme was launched specially for new retail business who prefer to go Online.

Another Government Grants:

  1. Capability Development Grant : CDG grant support can extend up to $30,000 and up to 70% of qualifying costs spent on training, certification and consultancy in the business. These projects encourage investment and growth of all those projects which are innovative and make considerable difference to the society and GDP .Capability Development Grant
  2. iSPRINT:iSPRINT is a comprehensive initiative that supports the adoption of ICT by SMEs, from simple solutions that improve business operations to innovative uses of technology that transform a business or sector. Previously, only SMEs who were first-time adopters of infocomm solutions were eligible for funding support of up to 70 per cent, with support for the rest capped at 50 per cent. The funding covers consultancy fees, training cost, manpower, hardware and software.
    Also included under iSPRINT are ready-to-use packaged solutions that help simplify the grant application process. SMEs can purchase the relevant packaged solution and implement it before seeking reimbursement from IDA upon successful implementation. To date, there are more than 150 iSPRINT Packages for Accounting, Payroll, Point-of-Sales and Software-as-a-Service (SaaS) solutions.
  3. PIC grants : Under the PIC Scheme, businesses enjoy400% tax deductions/allowances for qualifying expenditure incurred in any of the Six Qualifying Activities from the Years of Assessment (YAs) 2011 to 2018.  For YA 2013 to 31 Jul 2016, eligible businesses can also exercise an irrevocable option to convert qualifying expenditure of up to $100,000 for each YA into cash, at a conversion rate of 60%. For qualifying expenditure incurred on or after 1 Aug 2016, the cash payout conversion rate will be reduced from 60% to 40%. The PIC scheme will lapse after YA 2018.

All these government benefits are a boon to e-commerce industry as it helps existing members and the novice joiners also in deepening their roots. Also, the amount which is received as a grant can be invested towards increasing the scalability, warehousing, branding, design, marketing, business development, inventory management and customer service.

Conclusion: With all these grants and lenders available in the market, it is easy to provide wings to your innovative idea. This is the best time to invest in your own business in Singapore! So reach out today for Accounting services in Singapore!

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