Small- and medium-sized enterprises (SMEs) in Singapore want continued financial support from the Budget 2021 to help them to retain their employees while they continue to build back their businesses, according to the UOB SME Outlook 2021 Study.
More than half of SMEs want the Job Support Scheme (JSS) and the Wage Credit Scheme (WCS) to be extended in 2021 (59 per cent and 53 per cent for JSS and WCS respectively). The study also found that close to a third of Singapore SMEs polled said they applied for the JSS (30 per cent) and the WCS (27 per cent) in 2020.
Priorities differ as SMEs embark on their road to recovery in 2021
As businesses gear up for the road to recovery, the need for financial support to ease cash flow in the short term is most keenly felt by small businesses. Tax incentives (38 per cent), easier access to funding and grants (37 per cent) and assistance to apply for these grants and schemes (36 per cent) also topped the Budget 2021 wishlist for small businesses.
Meanwhile, larger SMEs seem to have a longer-term horizon view for their Budget 2021 wishlist, such as how they can access financing and partnership ecosystems to grow or to transform their businesses. This comes as close to three in five of larger SMEs polled also said that they have a positive outlook of their business in 2021. In comparison, only half of small businesses surveyed said the same.
Larger SMEs surveyed said they want more opportunities for public and private collaborations (34 per cent) and collateral-free loans for business transformation (31 per cent).
Mr Eric Tham, Head of Group Commercial Banking, UOB, said, “Given the pressures on revenue that many SMEs in Singapore faced during Singapore’s Circuit Breaker period and subsequent gradual re-opening of the economy, it is not surprising that they are seeking support to ease the pressures on their margins.
“The UOB SME Outlook Study 2021 shows that there is a continued need to support these businesses, which form the backbone of our economy, in their road to recovery. This will help them to retain their people, to boost their long-term resiliency and to capture growth opportunities along the way.
“In 2020, the number of our SME customers whom we have helped to access government assistance schemes increased by more than three times year on year. The COVID-19 pandemic has also emphasised for many businesses that we are all connected as part of a global ecosystem and the role that their companies can play as a corporate citizen.
“We also saw an increase in queries on how businesses can tap green loans in the past year as more companies prioritise sustainability considerations,” he concluded.
Industries hit hard by pandemic most keen on financial assistance to retain jobs
The need for government assistance to protect jobs through the likes of the JSS is seen most heavily among SMEs in sectors that continue to be impacted by the COVID-19 pandemic. These include the wholesale trade (48 per cent) as well as the real estate and hospitality sectors (54 per cent).
In contrast, SMEs in sectors, such as manufacturing and professional services5, which are already posting growth display stronger preferences for industry partnerships.
Within the manufacturing and engineering sectors, 43 per cent of SMEs prefer opportunities to collaborate with industry bodies, government-linked companies or large businesses.
Meanwhile, 45 per cent of professional services firms want to be part of partnership ecosystems to learn and to adopt best practices.
Mr Lawrence Loh, Head of Group Business Banking, UOB, said, “The study findings reflect how small businesses are focusing on overcoming their immediate cash flow challenges, which will in turn help them to protect jobs.
“At the same time, we continue to work with our ecosystem partners including Google, Shopmatic and Getz to help small businesses enhance their operational efficiencies and boost their online revenue growth through digital solutions.
He described how the bank has supported small businesses in setting up their business online quickly and conveniently, so that they can tap new sales opportunities from local and overseas customers. “With the green shoots of economic recovery growing stronger in the year ahead, it is important that SMEs be part of industry ecosystems so that they can have immediate access to current and future business opportunities,” he concluded.