Anyone who’s ever worked on a start-up understands the value of getting funded.
In fact, ask any start-up entrepreneur about their biggest headache, and they’ll be apt to answer:
But thanks to the Singaporean government, the start-ups in this city-state are well-funded by a diverse range of government grants.
One such grant is the CDG.
What’s the CGD?
CDG = Capability Development Grant
CDG is a financial assistance programme instituted by Enterprise Singapore, a statutory board formed through the merger of International Enterprise (IE) Singapore and SPRING Singapore.
It’s designed to position Small and Medium-sized enterprises in Singapore for the next phase of growth.
What Does CGD Support?
The grant is meant to help businesses expand their capabilities across ten different key areas:
- Branding and marketing: Use the grant to raise your company profile, take your brand global and create an awesome value proposition.
- Business Excellence: Use the grant to upgrade your management system and make it more efficient. Be sure to improve organisational performance.
- Intellectual Property: The grant can also be used to safeguard your business and protect intellectual property. You want to do all this to gain a competitive edge.
- Financial Management: The grant is also intended to help you manage your financial resources better. Take charge of your finances by improving your financial management capabilities.
- Standards Adoption: It’s simple – you can not transition to the next level of growth or success with pretty low standards. Raise your standards (better yet, adopt new standards) to raise your competitiveness, improve your processes, and enhance your business credibility.
- Product Development: The CDG supports any quest to enhance your business competitiveness by leveraging new trends and technological innovation to develop better products or offer better services.
- Service Excellence: Use the grant to enhance service delivery. Adopt new service innovations and delight your customers.
- Human Capital Development: You have to invest in top of the shelf human capital. Don’t just settle for anyone. Go for the cream-of-the-crop talents that the country has to offer, and use the grant to afford them.
- Processes for Productivity: Figure out how to improve workflow processes. Also, for maximum productivity, optimise resource allocation using all the right tools or custom work system.
- Business Model Transform: Maybe your entire business model needs a complete overhaul. The grant gives you the financial muscle to embark on a structural procedure that will see to it that your business model improves to give you a competitive advantage.
The grant can defray up to 70% of the cost incurred by qualifying projects, including training, consultancy, equipment cost, and certification. It’s intended to support a large-scale upgrade of projects in the areas mentioned above.
How is the CDG Beneficial to SMEs?
Some SMEs don’t see how this government grant could benefit them. We also understand that some of you are hearing about this grant for the first time.
Here’s a rundown of all the benefits that come with applying for this grant:
· Facilitate Your Business Growth
The whole idea behind this grant is business growth. It’s designed to support a series of innovative activities that steer your business towards the next phase of growth. It does this by improving your business capabilities in the addressed areas.
· Gain International Recognition
Your business isn’t restricted to the local borders. With the support of this government grant, you can take a shot at the international market. It’s your one-in-life-time chance to expand beyond the confines of the local boarders.
· Support SME Innovation
The CDG pushes you to the limit. You have to think outside the box. You have to come up with innovative ideas that set your business on the right path to grow. Challenge what your competitors are doing by doing something unheard-of, and watch as the rest of the industry plays catch-up.
· Free Money
The primary benefit of this grant (or any other grant, for that matter) is that, unlike loans, it doesn’t have to be repaid. It also doesn’t require you to part away with any equity in your business. Ideally, the grant is supposed to help your business grow.
So, as long as the fund is used for the intended purpose as specified in your application, your business should be in the clear.
How do You Tell if You’re Eligible for the CDG?
Sadly, the CDG no longer exists. It was scrapped off on 24th October 2018. In its place, the Enterprise Development Grant was launched.
Since you cannot apply for the CDG, be sure to check the eligibility criteria for the EDG instead.
Who Can Apply for the CDG?
The CDG is no longer available.
The grant was available for both new and existing businesses.
· For Existing Business
For those with an existing business (a business that’s already generating revenue), you were allowed to apply for the grant if you were embarking on a new project. This new project had to be along the lines of building a technology platform that allows you to manage your business better.
That was the primary criteria for qualifying for the CDG.
· Other Requirements
Note that: for ICT projects, you were to first run your application through Infocom Development Authority (IDA). The whole process took about 6 to 8 weeks.
· For a New Company or Product
For a new company or product, a better alternative for the CDG would have been to apply for the Productivity and Innovation Credit (PIC). Sadly, the grant was also discontinued just about the same time, and it gets worse, as there’s no replacement program for it.
The Application Procedure
The CDG was among the easiest government grants to apply.
All you had to do is head over the Business Grants Portal, where you were guided on how to proceed with the application procedure.
Projects asking for grant support of less than $30, 000, there was no need to compose a lengthy project proposal. Instead, all you had to do is fill in an application questionnaire and then wait for 4 to 6 weeks for your project to be approved.
Pre-application Procedure for the CDG
Note the following when applying for the CDG:
- Prepare the latest ACRA search of your company (done within the last six months). Also, if applicable, do the same for your corporate shareholders. The latest ACRA search refers to the latest business profile as issued by ACRA.
- Run a financial audit of your company for the last one year and prepare the financial statement. Also, if applicable, prepare a consolidated financial statement of the parent company.
An audited financial statement refers to the financial statement audited and prepared by a certified, ACRA-approved public account.
- Prepare your project proposal, especially if you’re planning to ask for more than $30, 000 of grants. Be sure to go through all the proposal writing guidelines and make sure you’ve completely understood them.
- Prepare your proof of quotations. This proof must be relevant to your project’s cost. Proof of quotation refers to the official document prepared by a quotation vendor or consultant.
CDG Approval Process
- CDG Officer: You’ll be assigned a CDG officer once your application has been received. The CDG officer is supposed to stay in touch with you and keep you updated in case any issue arises.
- A Meeting: The board will ask you for a meeting to discuss your project and business.
- Revision of Application: You may be asked to revise your application in case you missed anything important.
- Productivity Indicators: Depending on your industry or level of project development, you may be asked to provide current and projected productivity indicators.
- Notification of Approval: A message will be sent to you notifying you that your application has been approved. In the message, there’ll be log-in details to the Grant portal. You’ll be required to log into the portal and accept the Grant letter.
Common Mistakes to Avoid when Applying for the CDG
- Never use the grant to buy equipment
- Never pay service providers after claiming the CDG
- Be sure to apply before you can go ahead and confirm service with a vendor
- Make sure your company is registered in Singapore
- The company must also operate in Singapore
- Make sure you have at least 30% of shareholding stakes in the company
- Your company workforce shouldn’t exceed 200 employees
- The total annual sales revenue must also not exceed $100 million.
What’s the Difference Between the CDG and PIC?
This is a common question among many Singapore SMEs. Well, we plan to address some of these differences in this section of the post.
6 to 9 months
== Raise service standards
== staff training
== oversea expansion
== Adopting technology
== Increase Company Productivity
== Add latest technology
CDG Time FRAME
After Submitting Your Application: After finding your service provider, the next thing you want to do is submit your application to the Business Grant portal. You’ll be notified in 4 to 6 weeks whether or not your application was approved.
The CDG Project: The board may ask to meet you to discuss your company and the objectives you have, together with relevant KPIs. There’ll be a lot of research involved.
The Entire Project: The entire project may stretch from 3 to 9 months. And once the project is finished, you’ll be asked to submit a project and audit report. After that, it will take another six to eight weeks before funds are disbursed via GIRO and directly to your business’s bank account.
Practical Example of How to Use the CDG in Singapore
Joseph is employed in a restaurant in Singapore. He’s the company’s Human Resource Manager.
The franchise company has 15 different branches, each of which employs a work staff of about 15 members. In total, the company has about 180 employees.
Following the rapid rate at which the company is growing, Joseph has decided to upgrade the recruitment software that the company uses. He wants to improve how he manages the company’s employees, with proper records and data.
Getting the new software means he’ll be able to boost the company’s performance reviews, streamline data, and improve on the recruitment process.
The new software will cost them $10, 000. Add the HR consultation fee ($2000), and the cost shoots up to $12, 000. If the grant goes through, that means the company will only have to pay 30% of the cost (about $3600).
Frequent Asked Questions (FAQ) on Capability Development Grant (CDG).
· When did the CDG end?
CDG ended on 24th October 2018. That marked the end of it. It has since been replaced by Enterprise Development Grant (EDG)
· What’s CDG?
CDG is a government grant that was scrapped off in 2018. It’s an abbreviation for Capability Development Grant.
· What Purpose does it Serve?
The grant was designed to help companies expand their capabilities in 10 different key areas. Examples of activities that the grant supports include performance audit, training, projects, and so forth.
· How much Grant Can I Get?
You’re eligible for up to 70% of the grant if your application sails through.
· What’s the Maximum that You Can Apply?
Technically, the grant has no cap. However, the amount disbursed directly correlates with your annual turnover. The grant will defray up to 70% of the cost incurred by your new project.
· Is there a way to Estimate how much Grant will be Approved?
For a small CDG project, the chances are high that the approved amount will be less than $40 000. However, your consultant should be able to help you come up with a more accurate estimate.
· What’s the Eligibility Criteria of the CDG?
To qualify for the grant, you must meet the following:
- Your company must be registered in Singapore. Even more important, it must also operate in Singapore.
- You should at least have 30% equity in the company.
- The annual sales revenue of the company must not exceed $100 million. Also, your workforce shouldn’t exceed 200 employees.
· Can Start-ups Apply?
Start-ups don’t qualify for the CDG. Your financial statements must at least read three years, which disqualifies start-ups.
· Can a Sole-proprietor Apply?
You’re allowed to apply as a sole proprietor. However, your chances of getting approved will be low. Any company with less than three employees has a low chance of getting approved.
Priority is given to big companies with the ability to expand and employ more people.
· What Documents Should I Prepare in Advance While Applying for the Grant?
Here’s a list of documents you might be required to present when applying for the grant:
For a Project under $45K
- Latest Bizfile or ACRA Records
- Project Proposal
- Financial statement for the latest year
- Proof of Quotation on a list of relevant cost items for the project
For a Project over $45K
- An additional business plan that the company prepared
- Projections on staff strength, remuneration, and revenue for the next three years. This has to be prepared based on your past financial statement.
· Who will guide me Through the Application Procedure?
Talk to an advisor at your SME centre about this. Or better, hire a certified consultant to help you out with this.
· Who approves the CDG Grant?
The grant is instituted by Enterprise Singapore, which also approves it. They’ll assess your application by looking at its feasibility and impact and have the final say on whether or not you qualify for the grant.
· How long will it take for my Grant to be approved?
It takes between 4 to 6 weeks before your grant is approved. The clarity of your application and proposal can fast-track the application procedure.
· How Will I Know if My Application Was Approved?
You’ll be notified about this through a letter, and the acceptable timeframe in which you must log into the grant portal and accept the offer.
· What if My Application Fails?
If your application fails and you feel like appealing, you’re allowed to do so by sending an email to the board.
· What About PIC?
PIC was stopped in 2018. It’s no longer available, and there’s no replacement program for it.
· What Program Replaced the CDG?
The CDG was also stopped in 2018. It would be replaced by the EDG (Enterprise Development Grant), which is in so many ways similar to the grant.
· What Other Grant Can I apply for?
You have a long list of other grants to apply for in case you fail to secure the CDG. Among them is the Productivity Solutions Grant.
This grant was designed to provide SME with easy access to pre-scoped infotech solutions. Check the SME portal for more recommendations on other grants to apply.
· What Should I Do to Increase the Chances of Getting Approved?
The best way to increase your chances of getting the grant approved is to hire a consultant. Work closely with the consultant to ensure your application has all the relevant information.
Also, make sure all the information you provide is clear and relevant. You may be required to get more information from your vendor before your application is approved.
· Am I Allowed to Apply for More than 1 Project?
Yes, you’re allowed to apply for as many projects as you wish. However, you have to make sure your current project is complete before you can proceed to make subsequent applications.
· Are there any Lump Sum Project Guidelines?
Of course, yes. There are guidelines.
For projects below 45K
If your project is less then $45K, which amounts to a claim of $30K and below, the application process is simplified. You’ll only be required to answer five key questions.
For Projects above 45K
However, if your project is more than $45K, which amounts to a claim of above 30K, you’ll be required to submit a proposal for the project. This is an entirely different proposal from the consultant’s proposal that you’re also required to send.
Here’s a link to learn more about the CDG Project Guidelines.
· What Will I Be Missing Out if I don’t Seek CDG Assistance?
You’ll be missing out on a lot.
But at the core, you’ll be denying your business the chance to stretch out its capabilities further.
· What area Should I focus on?
It’s Good You Asked.
As one of the leading specialists in Branding, we believe branding is paramount to the future success of your organisation.
Other areas to focus on include business processes and business model transformation.
· Whom do I Consultant with Regards to The CDG Grant?
On first base, your best shot would be to talk to one of the SMEs centres or a certified grant consultant (such as us).
· What’s the Minimum Employee Size?
You’ll be asked to specify your employees’ size when filling in your company profile. While Enterprise Singapore (formerly SPRING), doesn’t provide a clear answer on this, our experience has us thinking that it shouldn’t be zero.
And yes, your project sum should justify your company size. Everything has to make sense.
· What’s the Minimum Annual Revenue?
Again, you’ll be asked about your annual revenue or your company’s losses or profits while updating your company profile. Similarly, Enterprise Singapore has no definite answer to this.
Your project sum must align with your annual revenue, as well as your profits/losses.
If you insist on us giving you a figure, then our experience tells us that your annual revenue must at least be $500K.
· Am I Allowed to Begin Working on My CDG Project Before My Application Has Been Approved?
The answer is NO. Enterprise Singapore is very clear on this – You’re not allowed to embark on any CDG project before you receive the letter of approval.
Wait until your application gets approved before you begin working on your project.
That also prohibits you from making any payment to suppliers or service providers you’re planning to involve in the project.
· Will a Grant Consultant Help me make Claims?
A Grant consultant will only guide you on what to do to increase your chances of getting the grant. They, however, cannot influence the decision that Enterprise Singapore gets to make at the end of the day.
· Who’s Enterprise Singapore?
Enterprise Singapore is a statutory board operating under the Ministry of Trade & Industry. It’s tasked with the role of helping enterprises grow, as well as building trust and in Singaporean products and services.
Enterprise Singapore was formed after SPRING Singapore went into a merge with IE Singapore.
· Can I Use the CDG to Develop a Corporate Website for My Business?
The CDG grant is meant to help businesses expand their capabilities. This cannot be achieved through a simple corporate website.
How to Apply the CDG and PIC Together
The two grants were discontinued in 2018.
While the EDG would replace the CDG, the PIC has yet to be replaced by any program.
And yes, no rules were barring one from applying for the two grants simultaneously.
All you had to do was apply for 70% CDG, and then submit the remaining 30% to PIC, and defray the cost further by 40%.
Here’s the basic formula:
Assuming your project cost is $10, 000.
Applying for the CDG would have cut the cost by 70%. So, you end up with only 30% of the cost (30% of $10, 000).
That’s $3, 000.
You apply for PIC and further slice down the cost by 40%.
So, you end up paying only 60% of the already defrayed cost.
60% of 3000
That amounts to $1800.
That’s the amount you would have paid in the end. Instead of paying $10, 000, you apply for both the CDC and PIC and instead pay $1800.
CDG Claim Checklist: What to Submit
Here’s a list of documents to prepare before you can go ahead and log into the Grant portal to submit your claim.
You’re to upload this document into the grant portal unless instructed otherwise.
· First-time Grant Applicants
First-time applicants are expected to fill a GIRO form and a set up a GIRO account. This is a one-time thing.
After you fill the form, you’re to send it to Enterprise Singapore by post.
Address: Finance Department, 1 Fusionopolis Walk, #01-01 South Tower, Solaris Singapore -138628
· Subsequent Applications
In the letter of offer, you’re to identify a claim that applies to you.
You have two options when it comes to this:
- Interim Claim on Declaration: for this, you’re required to navigate to the ‘current project’ panel and click on ‘submit a claim.’
- Claim on Reimbursement basis: Go to “project information” tab and fill in all the necessary information. Keep in mind that any field marked with an asterisk is mandatory.
· Final Claim
These documents can be uploaded in the portal or send directly via mail.
Salary: CPF statement of your staff (of any month with the stipulated period). For foreign employees, you may also be required to provide their work permit.
Equipment and Software: Delivery orders, Invoices, Hire purchase agreements, receipts, and so forth.
Certificates: Only required if you’re looking to enhance your quality standards.
Other costs: Invoices and receipts to serve as proof
Copy of S-class Health check and Payment receipt: This only applies to service projects. Otherwise, you’re free to ignore them.
Even more important is to ensure your actual expenses as summarised in the table match the amount indicated in the supporting documents.
· For Human Capital or Leadership Development:
Here are the supporting documents you’ll need:
Scholarship deed (for degree and MBA courses)
Certificates (Exam Results/ Latest Examination Transcript)
Course Fees (Receipt and Invoices)
Cost Items: Upload all the supporting documents for cost items to the grant portal or send them to an appointed auditor through direct mail or post.
Mistakes to Avoid when Applying for Grants in Singapore
Many companies in Singapore have yet to take advantage of grants. And those that make attempts to, fall victim to some of the slip-ups we’re about to highlight in this section of the post.
· Choosing the Wrong Grant
You have to be extra careful when evaluating grants before settling on any one of them. No two grants are the same, and that means you have to understand the grant inside out and make sure that it snugly correlates with your company objectives.
- PIC: Provides cash payouts or tax deductions. It came to an end in 2018.
- CDG: Was created for SMEs with proven business models and solid income streams. Can’t be applied by start-ups. In 2018, it merged with GCP (Global Company Partnership) to create the EDG.
Remember: the procedure for grant application can be time-consuming and lengthy. So do your due diligence from the word go and understand the options before you. In the end, you want to choose a grant that you’re sure of and, most importantly, best suited for your business.
· Forgetting the Funding
Securing grants is not just about the funding. It’s about building your company’s credibility. The message that investors and clients get is, government agencies trust your business.
You’ll, therefore, have an easy time pursuing further funding once you succeed to nail the grant.
· Not Claiming Staff Cost
Many businesses don’t claim staff costs, and it’s mostly because they’re hard to identify from a purely accounting angle.
Here are the eligible categories for claiming staff costs:
Internal Training: The cost of taking your employees through training.
R&D: the cost of research on your project. How much time did your team pump into research, and how much were they compensated?
Automation equipment or IT products: what cost did you incur whole developing some of your automation tools?
· Wrong Pitching
Another common mistake that businesses make while applying for grants is wrong pitching.
A strong grant application starts with you understanding the underlying grant to the core. Start by understanding its key objectives, requirements, and targets. Find out more about their past and futures initiatives.
How to Pitch: The best angle to frame your pitch is on that looks at how Singapore can benefit from your business should your application go through. Will it be generating jobs or are you creating an automation tool that will be useful to the whole industry?
There goes your ultimate guide on how to apply for the CDG grant in Singapore.
And since the grant no longer exists, we suggest you check out with the EDG grant instead.
Be sure to also contact a corporate firm such as us for more guidance on financial management and how to apply for any grant in the country.