The hope that 2021 will be a much improved year compared to 2020 is proving to be highly unlikely, especially for Small and Medium Enterprises (SMEs) that are struggling to stay afloat in the midst of the COVID-19 pandemic.
QBE Insurance Singapore conducted a survey involving over 400 SMEs from a range of sectors late last year, taking into consideration the impact of the pandemic on the economy.
Here are the findings.
Survey: Half of Small Businesses in S’pore Counting on Financial Relief from Gov to Tide Over COVID-19 Period
81% of SMEs expect the general size of their businesses to either remain the same as before or face a decline in 2021. At the same time, 64% of SMEs expect sales to either stay the same or decrease.
Meanwhile, half of the SMEs surveyed are banking on financial support from the government to tide through this difficult period caused by the pandemic. A mere 3% of SMEs surveyed have indicated that they do not plan to depend on government support.
While most SMEs indicated a specific need for financial support, others have also pointed out the need for developmental programmes and general advice from the government.
However, the survey also found that even though the large majority of 95% of SMEs are aware of government initiatives and aid packages available to support them financially, only 61% have gone for these support schemes.
Challenges Faced By Businesses
According to an article by TODAYonline, the survey found that around 3 in 10 SMEs pointed out that cost mitigation was the biggest challenge that they faced in 2020, and slightly over half of the SMEs expect to have to deal with cost mitigation problems in 2021.
4 in 10 SMEs stated that they would be inclined towards decreasing the size of their companies or employing more effective working measures.
Unsurprisingly, the companies shared that any plans for expansion will be put on hold for the year of 2021, when the economy remains severely affected by the pandemic.
Government Aid for SMEs and Businesses in 2020
April 2020 saw the closing down of about 3,800 businesses in Singapore, with COVID-19 putting immense pressure on the economy.
In order to help keep companies going and workers employed, the government introduced four fiscal packages as part of Budget 2020: the Stabilisation and Support Package, Resilience Budget, Solidarity Budget and Fortitude Budget. In total, the government spent almost $100 billion on all four packages.
An example of the help rendered is the Jobs Support Scheme, whereby the government pays part of a Singaporean employee’s salary.
Grants have been offered by the Singapore government specially for SMEs during the COVID-19 period, such as the Enterprise Development Grant for companies that wish to innovate or take on overseas ventures, as well as the Productivity Solutions Grant (PSG) for companies looking towards IT processes to improve business operations.
For more information on the grants offered to SMEs by the government in 2020, refer to this article.
DPM Heng will be unveiling Budget 2021 on 16 February, so we’re pretty sure many small business owners will be glued to the television on that day.
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