Positioning SMEs For Better Times

SMES need to transform their businesses to tide through the current turbulence.

sme transform

Author: Joyce Tee, Managing Director and Group Head, DBS SME Banking

The recently announced Budget was a balanced one that addressed immediate growth concerns while keeping an eye on the more critical longer-term task of transforming the economy. An overall surplus of SGD 3.45bn is expected, allowing for more short-term spending should the need arise.

It also featured its fair share of 'goodies' for Singapore's small and medium enterprises (SMEs). In particular, the Industry Transformation Programme is a key initiative that aims to strengthen enterprises and industry, and to drive growth through innovation.

Measures such as tax incentives to encourage firms to venture abroad or funding to boost automation are much welcomed moves that go to the heart of what is plaguing local enterprises - high operating costs, a tight labour market and weak demand. At DBS, we too have unveiled a series of initiatives in recent years to give our SME clients a leg up in this tough environment.

Taken together, these measures are aimed at helping businesses transform themselves in order to survive and grow.  We believe that SMEs can make this crucial leap in three ways. Firstly, they need to adopt new technologies to enhance their operations in order to boost productivity and strengthen their core capabilities.

In the past year, we have helped businesses do this through DBS BusinessClass Disrupt– an innovative programme that matches local businesses with technology start-ups from around the world who craft customised solutions to address our SMEs’ problems - ranging from inventory management to talent retention.

The initiative is already yielding positive results. After going through the 6-week solutions matching and piloting process under DBS BusinessClass Disrupt, Triple Pte Ltd - the Singapore-based distributor of sportswear brand Under Armor - signed a 12-month contract with Australian technology firm Arcade, to provide them with game-based talent development tools.

SMEs can tap on Government assistance schemes such as the Capability Development Grant (CDG) to help them bring on board new technology. This allows a company to defray up to 70 per cent of their qualifying project cost. We have are also the first bank in Singapore to launch DBS Business Capabilities Loan (BCL), so that SMEs who have successfully applied for a CDG grant, or any government grants, can now finance their project expenses before the grant is reimbursed.

Beyond leveraging technology, local businesses must also be prepared to throw out the rulebook and adopt new ways of operating to stay ahead of the competition. Globally, we have seen upstart companies such as Uber and Airbnb disrupt entire industries with their innovative business models.

Finally, to overcome the constraint of Singapore's small domestic market, SMEs have to venture abroad to find new growth opportunities. Internationalisation is no longer a "nice-to-have" strategy for many companies ,but one that is essential for survival. Thankfully, there are many assistance schemes from International Enterprise (IE) Singapore that SMEs can tap on before making that big first step.

Recognising this need, our BusinessClass platform is also set to roll out regionally in the coming months, to help our SME members make the connections they need to in overseas markets.

SMEs should use this period of uncertainty to relook their business models and build their capabilities so that they can emerge from it stronger; allowing them to be in a better position to take advantage of the eventual upturn.

With its heritage as Singapore's development bank, DBS is committed to helping our local SMEs through the tough times, and we plan to do this one SME at a time.

What Budget 2016 Offers

Other Assistance  Schemes

Managing Cash Flow

SME Working Capital Loan scheme, for loans of up to S$300,000 per SME

Under SPRING Singapore’s Micro Loan Programme (MLP), DBS receives an average of 1,800 SME applications a year. This is more than 50% of all micro loan applications supported by SPRING in Singapore. We also have a comprehensive range of government assisted loans. For more information on DBS Working Capital Loan, please visit http://go.dbs.com/workingcapital or apply online in 5minutes here.

Increasing Productivity

New Automation Support Package to help companies automate, drive productivity and scale up.

The DBS BusinessClass Disrupt Challenge Programme helps SMEs connect with technology providers from all over the world offering solutions to a wide range of problems.

We are currently working with Government bodies to create an enhanced version of the initiative where Disrupt projects are supported by grants as well as preferential loan schemes like the DBS Business Capabilities loan. Contact us for more details.

More funding for the National robotics program to drive adoption of robots in business

Growing Overseas Business

Extend the Double Tax Deduction for Internationalisation scheme to Mar 31, 2020.

For businesses going overseas for the first time, IE Singapore offers knowledge and financial support under their Market Readiness Assistance programme.

The DBS Asian Insights team also provides timely macro analysis so that SMEs can prepare themselves for internationalisation. Read more here.

Accessing Industry Expertise

An entity called SG-Innovate to be set up in order to match new entrepreneurs with

SMEs can tap on to IE Singapore's International Marketing Activities Program, which offers financial support for tradeshows and missions for companies to get overseas feedback and study market conditions.

DBS BusinessClass also offers a pool of experts and advisors from various industries and areas of specialisation both locally and regionally.

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