What is Enterprise Development Grant (EDG)?
With the onset of Covid-19 and its impact on catalysing businesses towards digitalisation, many companies must adopt technology and innovate their processes to survive. Thankfully, companies can receive aid in doing so. The Enterprise Development Grant (EDG) is one such scheme that seeks to support Singaporean companies that are looking to upgrade, innovate or venture overseas. The three types of projects that fall under EDG’s coverage are:
- Core Capabilities: Projects that serve to help businesses strengthen their foundation and grow. This means that the project should go beyond the scope of just accounting and sales. As such, costs incurred through the production of marketing collaterals will not be offset by the grant.
- Innovation and Productivity: Projects that tap into automation and technologies to enhance operational efficiency or explore new areas of growth.
- Market Access: Companies looking and are ready to expand overseas
How can my business qualify for EDG?
If your business is looking to start a project in one of the three aspects listed above, the next steps in qualifying for the grant are to ensure that the business entity is registered and operating in Singapore, with at least 30% local shareholding. Applicants will also need to show the financial ability to start and complete the project. This will be supplemented through the provision of projected figures in the areas of company revenue, staff and depreciation costs and net operating profit before tax for three years after completion of the project. More details can be found here.
The grant will be assessed based on the project scope, outcomes, and the competency of the service provider. According to Enterprise Singapore, the estimated project timeline should be completed within 12 to 18 months, with most of our approved project length spanning between 6 and 12 months.
EDG is also applicable to SMEs and non-SMEs, as long as they are Singapore-owned companies. However, it is notable that SMEs receive greater support of up to 80% of qualifying costs while non-SMEs can only receive a lower percentage of support.
What types of project does EDG supports?
The grant funds the project costs relating to software and equipment, internal manpower and third-party consultancy fees. For consulting projects, the applicant has to engage an accredited consultant who is qualified under any of these three institutions:
- Institute of Management Consultants (Singapore) – Registered Management Consultant
- Singapore PMC Certification Pte Ltd – Practising Management Consultant
- TUV SUB PSB Pte. Ltd. – Singapore Certified Management Consultant
Duration and timing of application
Although stated as between 8 – 10 weeks on Enterprise Singapore’s official website, our experience with assisting firms in their application of grants suggests a shorter processing time than that. Additionally, it is important to note that EDG projects can only commence after submission of the grant application, although it is not necessary to await the approval of the grant. That also entails the risks of an unapproved grant or a smaller than expected sum disbursed. Based on our experience, the funds disbursed bears a high correlation with the applying company’s financial performance. This implies that a financially healthy company will receive a higher disbursement than a loss-making firm.
Conclusion
Amidst the current challenging business environment, grants like EDG also serve as opportunities that businesses can leverage on to scale their operations and innovate. Business owners must remain proactive in applying for such aid to cushion their transitory expenses. All things considered, there is also a need to exercise prudence in only applying for projects that are truly eligible for the grants. More importantly, business owners should not resort to accepting kickbacks when applying for EDG grants. The consequences of such acts range from being asked to refund the grants to a ban from all future grants and a civil court case. The government has also increased the number of checks on the applicant’s eligibility for the Enterprise Development Grant.
