To choose the right grant for your business, you need to understand your business needs. We highlight three grants (the PIC, ICV and CDG) and explain who they are best suited for.
If you’ve recently decided to open a food business, you’re probably steeling yourself for the astronomical costs that come with it – and if you’re savvy, considering the government grant options available to you.
You’ll be in good company – 74% of Singapore SMEs (a whopping three-quarter!) reported applying for government schemes between 2014 and 2015. The good news is that Singapore is awash with grant schemes for the well-informed. The bad news? The grants application process can sometimes feel like a maze of red tape shrouded in a PSI 3000-level haze of terms and conditions.
We asked Ishvinder Singh, a business development executive from the SME centre at the Singapore Indian Chamber of Commerce and Industry (SICCI), to give us an overview. (Full disclosure: Ishvinder currently helps Sphere with our grant applications. He kindly agreed to be interviewed for this blog post).
The Productivity and Innovation Credit Scheme, or PIC for short, is the most well-known scheme for SMEs. It offers companies substantial tax savings. However, the requirements are difficult for newer businesses to meet. For example, the company will need to employ at least three local employees (Singaporean/PR) with CPF contributions. In addition, any equipment or technical solution purchased under the scheme must showcase a productivity gain and cannot have been purchased as an operational expense.
Enter the Innovation and Capability Voucher (ICV). Targeted toward new SME business owners, the scheme comes in the form of vouchers that only need SME’s basic information. Each Voucher is valued at $5,000, and each SME can apply for up to 8 vouchers. These can be used for consultancy projects and productivity solutions, the latter including off-the-shelf technology such as point-of-sales systems.
SMEs in their second or third years can also consider is the Capability Development Grant (CDG), which was designed to develop SMEs’ capabilities by covering up to 70% of qualifying project costs. Qualifying costs would include consultancy, training, certification, and equipment costs, but unlike the ICV, application for the CDG requires applicants to produce a project proposal and financial statements for the previous year.
These are only a few of the options you can try. As a business owner, you should be evaluating your business to understand what your needs are, so that you can make the most out of the grants available.
In our next post, we’ll be digging deeper into the grant application process itself, and how you can avoid common pitfalls and delays.
For more information about the grants, their requirements, and supported activities, check out the resources below:
- SPRING Singapore – Food and Beverage Services
- SPRING Singapore – Productivity Brochure
- SPRING Singapore – Productivity Capability Solutions
F&B business tips, straight to your inbox
Subscribe to the Sphere blog for insider knowledge on running a F&B business in 2017. No spam, no monkeying around.