Enterprise Financing Scheme and Private Credit Growth Fund

Budget 2025 introduces significant enhancements to the Enterprise Financing Scheme (EFS) to bolster support for Singaporean enterprises' internationalisation and mergers and acquisitions (M&As) efforts:

1. Increased loan quantum: The maximum loan quantum under the EFS - Trade Loan has been permanently increased from $5 million to $10 million. This change aims to support businesses in meeting their increased trade financing needs, amid elevated costs and opportunities for bigger sized deals.
2. Broadened scope: The EFS M&A loan now covers targeted asset acquisitions in recognition that enterprises may choose to acquire assets as an alternative to equity acquisition.

The updated EFS is timely as it broadens its scope beyond equity acquisitions to include targeted asset acquisitions. This provides enterprises with the opportunity to make focused, strategic asset acquisitions. Such flexibility allows Singaporean enterprises to internationalise more effectively, managing risks by acquiring assets without being overly exposed financially. This strategic approach reduces the financial burden while enabling enterprises to grow and compete globally.

In addition to the changes, we look forward to Trade Associations and Chambers (TACs) continuing their proactive role in facilitating these growth strategies. For instance, TACs could set up targeted deals advisory services working with professional services firms to guide SMEs on inorganic growth strategies. This assistance can encompass advice on diverse capital stack solutions that go beyond traditional debt and equity financing. By connecting SMEs with professional expertise and financiers, TACs can help better position them for successful M&As.

Market Readiness Assistance Grant

The Market Readiness Assistance (MRA) grant helps qualifying companies to expand into new markets overseas by defraying the costs of overseas market promotion, business development, and market set-up. To continue supporting local SMEs’ overseas market expansion, the enhanced grant cap of $100,000 per new market which was originally scheduled to lapse after 31 March 2025 will be extended to 31 March 2026.

Global Founders Programme

EDB’s establishment of a dedicated Global Founders Programme (GFP) will aim to support select seasoned builders, operators and innovators to build their next venture using Singapore as a base. This will amplify the pull through economic benefit to Singapore and increase the vibrancy of our venture eco-system. More details will be announced by the EDB in due course.

Enterprise Compute Initiative

A new $150 million Enterprise Compute Initiative (ECI) has been announced to help enterprises better leverage artificial intelligence (AI) in their transformation journeys. Under this initiative, eligible enterprises will be partnered with major cloud service providers to access AI tools and computing power, as well as expert consultancy services.

Private Credit Growth Fund

Recognising the current lack of Asian or Singapore focused private credit funds, a  $1 billion Private Credit Growth Fund will be launched to expand fundraising options for high growth local and regional enterprises as they scale to compete on the global stage. This is part of a broader effort to enhance Singapore's capital market, which includes venture capitalists and private equity firms, and further attract more private credit players.

The new Fund seeks to plug the gap in financing for promising Singapore companies which may at times have difficulties accessing traditional bank loans. This presents an additional financing option for promising Singapore companies, characterised by its less-intrusive nature, and cost-effectiveness vis-a-vis equity financing. It serves as a complementary funding option for promising local companies, especially those that emphasise technology and scalability. This approach increases the likelihood of cultivating successful global enterprises based in Singapore. Raising awareness of this option will not only broaden the diversity of the capital markets but also potentially attract more private credit funds to Singapore. This influx of capital will solidify Singapore's reputation as a premier financing hub for supporting rapidly growing enterprises, ultimately contributing to the development of a dynamic and robust economy.