B.T.W

By Eileen Yu

By the way, ZDNet Asia has more to say

Show up the money, really

Posted in By The Way by Eileen Yu on Friday, March 06 2009 01:52 AM

Governments worldwide have been stepping in and scurrying to help their local business community ride out this current economic slump. Singapore, for sure, isn't one to be left out.

During its budget address in January, the Singapore government unveiled a massive S$20.5 billion (US$13.2 billion) funding pool to bolster market competitiveness and job security. Of this, S$230 million (US$148.2 million) will be set aside for the media and digital entertainment industry, providing much-needed grants to aid local businesses specializing in this market.

It all sounds great...local companies, especially the smaller shops, will get the financial help they so desperately need to tide over these difficult times, and employees will get to keep their jobs.

But, just how easy is it for local businesses to get the funds?

Some years back, over lunch with a friend who ran his own SMB (small and midsize business), he described how was trying to get investors to come in so he could finance some new projects for the company.

I reminded him about the various funding schemes the government had set aside for SMBs like his to tap, and that he was definitely eligible to submit an application for the grant.

As it turned out, he already tried that route, but decided not to pursue it because the approval process was too tedious, took too long and was tagged with too many terms and conditions. My friend needed to kickstart his projects in the shortest time possible so he could stay ahead of his competitors, and couldn't afford to wade through a long and winding path just to get some government funds.

Just yesterday, I was told about yet another promising local company--specializing in the digital entertainment space--that was finding the going tough in this current recession. Again, I dished out a reminder about the government's S$230 million fund, especially since it has been set aside specifically for local enterprises playing in this market space. Again, the head shook in doubt.

Dane Anderson, CEO of Springboard Research, said it best when he noted how it's just as important for governments to ensure funds are able to reach the companies they're intended to help. Much of the impact, he added, will depend on how quickly governments can get the money out to local businesses.

And I think that's something that is often overlooked.

Sure, governments might feel compelled to tighten the strings around the purse when they read about how some companies are using bailout funds to pay their CEOs fat bonuses. But, they are also small local businesses that genuinely need the money to pull them through.

To ensure their grants are not being misused, governments could perhaps set up subcommittees dedicated to handling fund applications for small local companies. This can help speed up the approval process, and at the same time, ensure the smaller boys that badly need financial assistance aren't slipping through the cracks.

In these times of need, it's not enough to simply promise help. We need to also ensure help is indeed received.

Disclaimer:
Views and opinions expressed in this blog are the author's, and do not necessarily represent those of ZDNet Asia.

Talkback 2 comments

Show up the money, really
Entrepreneur is akin to an infant growing up, don't depends on government like your nany to give you seed money, milk you, protect you... The money will come only when you don't need it anymore (ie when you are successful). It is an irony, but it is the real acid test if your start-up idea is really working and you can stand on your own for the first 18-24 months. Many years ago I went thru this 'govenment route' as an IT entrepreneur, the govenment million$-fund was like a "high-hanging" fruit - "can see cannot touch". The bureaucrats gave the money to those 'safer' entrepreneurs (University professors turned part-time entrepreneur but still keeping their hefty payslip, Silicon-valley dot.com fanciful projects, etc) who don't need the fund as bad as the poor local entrepreneurs, the laters who mortage their house, use up their past 20 years of saving, borrow from parents' "coffin" money ... One most successful IT entrepreneur who refused to be my mentor (as the 'guarantee' condition to obtain the 1 million fund) warned me sacarstically :"entrepreneurship is like throwing you into the sea, you either float or drown. You don't need life-jacket. If you float, you don't need me. If you are drown, then see you in heaven:)
Posted by anonymous on Monday, March 09 2009 11:53 AM

Show up the money, really
President Barack Obama and his cash advances are potentially very important because economic recovery, as we all know is very hard to achieve. This cash advance can somehow sustain economic activities of one nation. The good news is that the stimulus does seem to be working. The Commerce Department recently released its report, one of the features of which is a rise in manufactured goods, a key economic indicator. A lot of signs point to the stimulus working thus far and a quicker recovery than previously thought, which is good news. A little debt relief can help the nation with its recovery. personalmoneystore.com...
Posted by Elena X on Thursday, April 30 2009 06:41 PM

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About the blogger

Eileen Yu

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. These days, she gets stirred up over issues concerning Internet regulation, intellectual property rights and software patents, online privacy and data protection. Eileen is senior editor at ZDNet Asia, where she oversees the business tech news site.