Gov’t To Extend Venture Debt Programme
Deputy Prime Minister Heng Swee Keat announced today (February 16) that the Singapore government will ensure that high-growth companies, including startups, continue to have access to financial capital.
This will be done by expanding and improving the business finance program – Venture Debt.
Under the Venture Debt program, the government shares up to 70 percent of the risk of eligible loans with participating financial institutions.
According to Enterprise Singapore, this form of financing is generally suitable for high-growth start-ups that do not have significant assets to use as collateral for traditional bank loans.
Warrants, or equity purchase rights, are intended to offset the higher risk of default.
Heng said the government will continue to support this program and increase the limit on the amount of loans taken on from $ 5 million to $ 8 million.
The government expects S $ 45 million in venture capital debt to be catalyzed over the next year.
In addition, the government will ensure that growth capital is available to large local businesses (LLEs) “that are ready to transform or expand overseas on a larger scale.”
Heng announced that S $ 500 million will be set aside to be co-invested with Temasek in a local business finance platform, to be managed commercially.
Temasek will match government funds on a one-to-one basis, so the platform will have S $ 1 billion for its investments.
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