Government Grants – Why It Might Not Be For You

“What Government Grants are there for me to claim while doing my website?” This is a very common question that we hear when customers come to us to ask for their website or Ecommerce site to be done.  To be honest, there are a large variety of government grants that are available for IT products and solutions in Singapore’s push to digitalise their economy. However, is it recommended for everyone? 

This article will reflect some of our thoughts about government grants and we are writing this with the thinking that you belong to the following customer segment:

1. Self Employed – This can be property agent, insurance agents etc
2. Freelancers – This can be your tennis coach, golf coach, tuition teachers etc. 
3. SMEs – We define this as small medium enterprises with less than 3 staffs or the directors/shareholders mainly makeup the company. Also, this can be newly formed company that are less than 2 years old or companies that do not have a strong Singaporean/PR core. 

Before we begin, our company is in full support of a being a vendor for government grants disburse out by the relevant agencies. We do help our clients to claim government grants for their IT solutions as well. However, we are very careful to recommend the grants to our customers to prevent any misunderstanding when the grants can’t be claimed. 

1. Longer Process & Cashflow Issues

The money from government grants generally come from taxpayers pockets. The agency have a stringent process in ensuring that the money is well spent and allocated to the right companies. Very often you find that in applying for government grants, there is a very long paper work process to ensure that the right information are in place. Generally, most of our customers are the bosses themselves, this means alot of time spent on just filling up forms. If time is money, then the government grant is not really free money. This is a trap that many customers face while going through the process. 

In a bigger company, there will be a HR/Finance team to fill up the forms and this could make sense for those customers. 

With this being said, the government agencies are aware of this and are constantly trying to streamline the process for those that apply. 

As grants are tax payers money, the government is also very prudent in its spending. Very often, you find that you will need to pay first and get reimbursed about 3-4 months later. This presents a cashflow issue for customers who are cash tight. After using the software, sometimes our customers will also have to “report” back on how the software has helped them and this takes up time to fill up more forms. 

Typically, a process to claimed a software under Productivity Solutions Grant (PSG) will be the following:

1. Apply for approval – This can be as quick as 1-2 weeks to get the approval but it depends if they have any questions and if the completed set of documents are submitted. ESG has the right to ask for more information before sending you the letter of offer. Each “question and answer” usually takes another 1-2 weeks and this excludes the time taken for our customers to get those information. 
2. Letter of Offer – Once you have the letter of offer, we can start work and provide you with the solution. This will take another 3-8 weeks depending on what you are purchasing. (* Simple websites and Ecommerce sites are not claimable) 
3. Claim Process – After the handover from us to you, you will have to log into the Business Grant Portal to prove completion of project, submission of invoice, receipt, proof of transfer etc. They will then reimburse you the money 30-60 days later. Again, any back and forth with incomplete documentation and question is typically another 1-2 weeks.

The above process varies on a case by case basis. Sometimes it is much faster and sometimes it much slower. There is also a chance that you might not get approved at stage 1 and stage 3 after completion of project. 

2. You Might NOT Qualify For The Grants

“I read on the news that I qualify for this grant! I definitely can claim” 

This is a very common response. As with all government grants, there is always a clause that says “Subject to approval”. Based on our experience, there are cases where they do not get the grant even though it seems they qualify on paper. 

First of all, every grant has a budget. Once this budget is used up, it will no longer be available for disbursement. Thus, move quick. 

Second, every grant has its own set of criteria. The following are very common for grants:

1. Registered or incorporated in Singapore. This refers to Private Limited Companies only. 
2. At least 30% local shareholding by Singapore Citizens or Singapore Permanent Residents
3. Employment size of not more than 200 (at group level) or with annual sales turnover (at group level) of not more than $100 million

Thus, for customers who are self employed such as property agents would not be able to qualify for most of the grants. 

Thirdly, the government has every right to ask for more information and documentation. One of the common questions that they ask for are financial statements from the past 3 financial years. Very often, newly formed companies are unable to provide these documents. This doesn’t mean that they will automatically be rejected but every grant is subject to approval. 

3. You Might Be Buying What You Don’t Need

Grants in general are created to spur the local economy and for tech products , it is used to boost digitalisation in Singapore Businesses. This often revolves around productivity gain, innovation product, change in operations or business model,etc. In a nutshell, Corporate website/Ecommerce are generally not claimable or fundable items. Thus, usually what we do with customers is to upsell other items such as Branding packages etc.

This will mean that the overall project scale will be much bigger (which will have a greater impact to business operations) and the amount outlay will be higher i.e. at least 10-30k per project. The delivery time will also be about 2-3 months. 

Now is this what you are looking for? Or are you buying things that you don’t need but good to have?

At Web Delegate, we always look at our customer’s business and recommend the best solution to them. Our prices are competitive with corporate websites starting at SGD$899 and E-commerce websites at SGD$1,999. We also have comprehensive support plan packages to guide you and support you through this digital journey. 

So what are you waiting for? Just chat with Sophie through the online chat button on the bottom right hand corner and get started on your digital journey!