Singapore has a very supportive business environment that provides various startup financing options for entrepreneurs. Even so, the government continues to come out with new initiatives and grants to encourage the growth of startups and small and medium enterprises.
Today, we’ll be sharing some startup financing options you can consider when starting up a new business venture in Singapore.
1. Government Schemes & Grants
Singapore has an extensive and vibrant startup ecosystem, with a reliable and stable political and compliance framework. The plus point for entrepreneurs in Singapore is the ease of incorporating a company in Singapore, and the flexibility of business structures one can choose from.
There are also various support schemes and grants available to relieve the financial burden of starting a business in Singapore. The government has been especially supportive and encourages people to start their own business with the grants they provide.
Some go-to grant providers and schemes include:
- Productivity Solutions Grant (PSG) by Enterprise Singapore
- Startup SG – Offers various grants depending on expertise and industry.
- Market Readiness Assistance (MRA) Grant by Enterprise Singapore
- Business Improvement Fund (BIF) by the Singapore Tourism Board (STB)
- Building Information Model Fund (BIM) by the Building and Construction Authority (BCA)
Depending on the industry, nature, and scope of your business, your eligibility for the grants and schemes vary. For more information, you can get in touch with us here.
2. Crowdfunding
Crowdfunding is popular method of financing a business venture or project that is still in the works. The funds come from the contributions pooled together by a large group of people who supports your business idea. Essentially, you are pitching your business idea on a “platform”, and others who like the idea pledge money to support your venture.
Some commonly used crowdfunding platforms include:
3. Angel Investors
Angel investors are private investors. They invest capital and contribute business expertise in exchange for a share of the company. In addition, these entities can be individuals or part of an angel network that invests in businesses with high growth potential. Furthermore, these angel investors could potentially take on active roles within your business or remain as sleeping partners depending on your arrangement.
There are various networks you can scout to seek out angel investors such as:
4. Venture Capitalists
Venture Capitalists are in short, professional investors. These people/organizations specialize in investing in startups. The condition however, is usually to be given a more hands-on role in the business. This is for them to ensure the profitability in the businesses that they have invested in.
Similar to angel investors, these venture capitalists can provide your business with advice on operational and management matters. Regardless, the venture capital industry in Singapore is relatively new and small compared to those in US or Europe. Nevertheless, there is a still a sizeable number of venture capital firms in Singapore such as:
- East Ventures
- Far East Ventures
- Golden Gate Ventures
- Spiral Ventures
- Singapore Venture Capital & Private Equity Association (SVCA)
For more venture capital companies in Singapore, check out this list by Tech In Asia.
5. Private Financial Institutions
Obtaining startup financing from private financial institutions means taking on private funds from banks, financial institutions and investment companies. This option provides entrepreneurs with a larger selection of financing opportunities as they are more prevalent in Singapore.
These funding sources do not usually require an active role in your business in return for the funding. Instead, they look for attractive returns (Eg: high interest of 7-12%) on their investments. Hence, established companies with a good track record and high growth rate benefit from these sources.
Alternatively, there are various micro loan programs facilitated by the Singapore government under Spring and IE Singapore. These make it easier for entrepreneurs to take up small business loans from financial institutions such as DBS, OCBC, Standard Chartered, etc.
In summary, these are just 5 examples of startup financing sources that budding entrepreneurs can approach. This list is of course, non-exhaustive, and feel free to approach us here if you require advice on starting a business in Singapore.
In addition, if you would like to find out more about other accounting and finance related content, you can check out our resources here:
