Taking advantage of Government support to battle Covid-19 impact
Local businesses must leverage generous government assistance to cope with the worsening crisis
Local businesses were dealt another blow when the Government instituted its latest set of measures to curb the spread of the Covid-19 virus. These unprecedented “circuit breakers” that kicked in on April 7 would see all except “essential” businesses close if their employees are unable to telecommute. Social gatherings apart from those involving family members living in the same household have also been prohibited.
These moves have had a huge impact on a wide range businesses, with SMEs hit particularly hard. For instance, while F&B operators can remain open, they can only cater to delivery or take-out orders.
To help businesses and workers cope during this challenging period, the Government rolled out a third round of support measures known as the Solidarity Budget on April 7; following the Resilience Budget announced on March 26 and the annual Budget unveiled on February 22.
Collectively, these measures worth almost S$60 billion aim to provide near-term relief for local enterprises, their workers and the self-employed as they deal with the fallout from the coronavirus. These include enhanced cash support for employee wages and self-employed income, enhanced commercial property rebates that landlords will have to pass on to their tenants, rental waivers and easier access to enterprise financing.
SME borrowers can also choose to defer payment of principal on their outstanding loans and pay only interest up to 31 Dec 2020.
Having called for more help since the Budget in February, SMEs have welcomed the subsequent assistance from the government. In particular, they cheered the government’s decision to enhance the Jobs Support Scheme (JSS) by increasing the wage subsidy to 75 per cent for the first $4,600 of gross monthly wages per local employee from all sectors. The scheme will also run for nine months, up from three months previously.
According to a survey by SBF, an overwhelming 77 per cent of respondents said that the Enhanced Jobs Support Scheme was most beneficial during this time. “This enhancement will greatly benefit businesses in alleviating manpower costs during this difficult time, resulting in jobs saved,” said Kurt Wee, Chairman of SBF’s SME Committee and President of the Association of Small & Medium Enterprises (ASME).
He added that the one-year moratorium on loan repayments will also help businesses with their liquidity.
Speed of execution key
Mark Lee, CEO of homegrown apparel manufacturer Sing Lun Group, said that the focus now should be on the timely implementation of the various schemes, particularly the disbursement of funds from financing schemes. “The speed of disbursement is still key, because SMEs are living from hand to mouth, and how quickly they can get these working capital from the banks to them is still unclear,” he said.
He also proposed that the Government looks into lowering the cash ratios of banks during this time to encourage them to lend more to businesses.
Jacinta Ong, founder of retailer TEA Ideas, said that while the new measures will help her business stay afloat in in the short-term, it may not be enough to save them if the current crisis drags on for an extended period.
Making the most of assistance
While the outlook is still grim, business leaders urged Singapore companies to make the most of the assistance that has been doled out so far. Both SBF and ASME strongly encouraged all enterprises to utilise the available help to develop a plan to ride out till the end of the year. SMEs should also use the available schemes to strengthen their capabilities so that they can rebound quickly following the end of the crisis.
“We urge all enterprises to press on, and fully leverage the resources provided to strengthen their business and create good jobs,” said Mr Wee.
Meanwhile, SBF Chairman S.S. Teo called on all businesses, workers and trade associations and chambers (TACs) to do everything they can to contain the spread of the coronavirus. “Every effort counts. We need to work together with the Government to ride out this storm and overcome this crisis. The message is clear: Our companies need to preserve jobs to protect our workers and their livelihoods.”
SBF said that it would, together with the other TACs, continue to work closely with the government to help Singapore companies navigate the various schemes, ensuring that the benefits flow to them quickly.
SBF will continue to support businesses through initiatives such as the SBF ManpowerConnect scheme to help with the manpower needs, as well as the SBF-YBLN HOPE Fund, which provides an additional source of accessible and affordable funding for SMEs.
It has also launched the COVIDBiz Helpline to help companies navigate the COVID-19 related government advisories for businesses. Businesses can call the helpline at 6701 1138 or email COVIDBiz@sbf.org.sg.