The foremost concern & question that arises in a person’s mind for starting a new business in Singapore is “funding.” Starting a new business in a foreign country is always a challenging & mountain task, from funding to licensing to incorporation and more.
The existing businesses also need to raise funding from time to time for upgrading infrastructure to the latest technology, investing in the workforce to keep them skilled & updated with the newest technology & knowledge, and other areas of the businesses for business growth & smooth operations.
Where are the funds required for starting a new business?
Whether a new startup or an existing running business, every business needs to raise funding (capital) to ensure smooth operations. The key areas where businesses are usually required to raise funding are the following:
- Buying or hiring new equipment (machinery, tools)
- Upgrading the infrastructure with advanced facilities
- Investing in human resources & skilled workforce
- Investing in new products or services
Ways of raising funding in Singapore for your business
Singapore has always been the trending business-friendly hub for people & businesses around the globe to start their businesses in Singapore, be it the incorporation stage, licensing process, or raising funds. There are several effective ways of raising funding for business in Singapore. Let us walk you through the best ways of raising funding in Singapore for business.
Angel investors are private individuals like a successful business person, entrepreneur, or sole proprietor who mainly invests in new businesses (startups) in the form of capital, business knowledge, and expertise.
Angel Investors are often known as seed investors of the business & they receive a substantial stake in the business for their investment.
Angel Investors help businesses by offering mentoring, advice on business decisions, and dealing with clients & third-party vendors for procurement of services & raw materials to ensure that the businesses operate smoothly.
Venture Capital is private equity funding done by venture capitalists, primarily government bodies, high net-worth individuals & huge capital companies. They invest capital in the new or existing business because of Substantial elements of risk, Lucrative Tax Incentives & Business-friendly policies.
Venture Capitalists are also known as professional investors. They invest in the businesses via the Initial Public Offering (IPO) or acquisition.
Venture Capitalists receive a relatively hands-on position in the business. They help businesses by mentoring, dealing with potential clients, providing business advice, operations, supply chains, and many other vital areas & crucial decisions.
Equity crowdfunding attracts a lot of investors to fund your business in exchange for a financial stake in the business or the sale of the securities without incurring debt.
Equity crowdfunding is the best way of raising funding if you are a start-up or SME because it helps raise small sums of money from many potential private investors.
Singapore Government offers different types of grants to support startups businesses & SMEs with funding. Let us walk you through the different types of grants provided by the Singapore Government to businesses.
Startup SG Founder
Start-ups established by 1st-time entrepreneurs with creative & innovative business ideas will get a mentorship & a capital grant of $50,000 from the Singapore Government. The start-ups are required to put in $10,000 capital as a co-matching fund.
Enterprise Development Grant (EDP)
The primary goal of the Enterprise Development Grant is to support companies’ growth by providing them funding for applicable project costs like equipment, software & essential facilities expenses to enhance companies’ productivity, innovation, & revenue generation.
Energy Efficiency Grant (EEG)
Energy Efficiency Grant is designed especially for food manufacturing firms, food services firms, and different types of retail firms. Energy Efficiency Grant provides co-funding for energy-efficient equipment in pre-determined categories. The primary goal is to give financial aid for managing energy costs.
Productivity Solutions Grant (PSG)
Productivity Solutions Grant is designed especially for SMEs. SMEs get financial aid under Productivity Solutions Grant for creating new technologies & productivity solutions. SMEs are entitled to apply for financial relief PSG, up to 70% of costs for only applicable products.
Market Readiness Assistance Grant (MRA)
Market Readiness Assistance Grant is designed especially for SMEs. Market Readiness Assistance Grant helps SMEs obtain global enhancement by providing them with the financial aid of up to 70% of eligible costs to take their businesses overseas.
Banks provide loans on two bases in Singapore, either as a working capital loan or funding the businesses. Both working capital loans & funding are potential ways of raising funding for your business. Let us walk you through the difference between the both.
Working Capital Loan
- Helps in financing daily operations of the business
- Can be used for paying salaries of employees, accounts payables, payments to vendors, and other monthly payments
- Not suitable for purchasing long-term assets and long-term investments
For raising funding:
- Need to share essential information regarding business plan & business valuation
- Need to share project reports & essential information about the project depending on the type of loan
Incubators & Accelerators
Another effective ways of raising funding for your business are incubators & accelerators. Incubators partners with businesses in the initial development stage by providing them with the necessary equipment, workforce training, networks for doing business, & many other essential investments.
Accelerators are often known as startup accelerators & seed accelerators as they provide short-term intensive business programs to help businesses with mentorship & educational components for driving rapid business growth. Accelerators also offer strategic support to boost the scaling of innovative companies.
P2P platforms help businesses by linking them with the public for raising funding, similar to an IPO. Public Investors invest in businesses by investing funds and take interest rates on the amount of capital invested as their return.
Businesses can opt for P2P lending when they cannot get funding from the ways mentioned above, and they might get funding at a better interest rate than the banks.
Bestar Services is your one-stop solution if you are facing any issues or want assistance with raising funding for your new start-up or existing business.
Bestar Services is one of the top 10 Incorporation & Accounting Consultants in Singapore. We have provided services to thousands of businesses in Singapore & across the globe for successfully raising funding for their businesses in Singapore & helping existing businesses to take their operations overseas through MRA Grant.
Contact us today to get assistance from our highly qualified experts for raising funding for your business in Singapore. You can reach out to us via call at +65 62994730 or email at email@example.com.