Budget 2021: Gov’t To Extend Venture Debt Programme, Increase Cap On Loan From $5M To $8M

Deputy Prime Minister Heng Swee Keat announced today (February 16) that the Singapore government will ensure that high growth enterprises, including startups, will continue to have access to financial capital.

This will be done by extending and enhancing the Enterprise Financing Scheme – Venture Debt programme.

As part of the Venture Debt programme, the government shares up to 70 per cent of the risk of eligible loans with participating financial institutions.

According to Enterprise Singapore, this form of financing is typically suited for high growth start-ups that do not have significant assets to be used as collateral under traditional bank lending.

The warrants, or rights to purchase equity, is to compensate for the higher risk of loan default.

Mr Heng said the government will continue to support this programme, and increase the cap on loan quantum supported, from S$5 million to S$8 million.

The government expects about S$45 million of venture debt to be catalysed over the next year.

Furthermore, the government will ensure that growth capital is available for large local enterprises (LLEs) “that are ready to transform or expand overseas on a larger scale”.

Mr Heng announced that S$500 million will be set aside to be co-invested with Temasek in a Local Enterprises Funding Platform, to be managed commercially.

Temasek will match the government’s funds on a one-for-one basis, so the platform will have S$1 billion available for its investments.

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