Managing the rising costs of doing business

From manpower shortages to escalating operational costs, businesses are constantly faced with a myriad of challenges which threaten to impede growth and lower profit margins.

According to the UOB Business Outlook Study 2024 (SMEs and large enterprises), 84 per cent of businesses highlighted that they are somewhat or highly affected by inflation. Higher inflation has led 63 per cent of businesses to face increased operating costs while 42 per cent of businesses see a jump in raw material costs. It comes as no surprise then that 45 per cent of business owners are looking for support to cope with high inflation.

To combat these rising cost pressures, 3 in 4 businesses are planning to spend more on digitalisation efforts which will help increase their productivity, but 33 per cent cited affordability as a top challenge.

With the priority to grow revenues and achieve higher profitability, interest in overseas expansion remains high (74 per cent). However, 4 in 10 businesses struggle to find adequate financial support.

In the Budget 2024 wishlist, businesses also want an increase in SkillsFuture credit (42 per cent); a provision of grants and extra funding for digital adoption (39 per cent); support for GST rate hike (34 per cent), and incentives to adopt sustainable practices (29 per cent).

How the Government is supporting businesses

Measures were announced at Budget 2024 to help businesses cushion the impact of higher inflation and build a competitive edge for the future. To help businesses manage rising costs, the Government announced a S$1.3 billion Enterprise Support Package whereby companies will receive a 50 per cent Corporate Income Tax Rebate, capped at S$40,000 for the Year of Assessment 2024. The package also includes an enhancement of the Enterprise Financing Scheme i.e. SME Working Capital Loan of up to S$500,000, and an extension of the SkillsFuture Enterprise Credit until June 2025.

Source: MOF

From a sustainability front, under the enhanced Energy Efficient Grant, more sectors including manufacturing, construction, maritime and data centres will be eligible for co-funding in energy-efficient equipment. Previously, it was limited to businesses in food services, manufacturing and retail.

How UOB is supporting businesses

There are various business support schemes which you can tap on if you require funding for expansion or growth. The Enterprise Financing Scheme, for example, is jointly offered by Enterprise Singapore and financial institutions including UOB. The scheme helps businesses address seven key areas of financing needs.

The UOB Business Loan helps SMEs looking to expand, automate, or upgrade by providing additional working capital to sustain daily operations, with no collaterals required. As long as you are a start-up in operation for more than 6 months, you can easily secure funding at preferential rates – all within a one-day response time*.

Apply for loans or accounts on the UOB SME app

You can apply for a business loan or access the government assistance schemes easily on the UOB SME app.

One way to help companies manage the manpower crunch—due to unexpected circumstances or skill gaps—is through the adoption of digital solutions to automate repetitive and time-consuming tasks. UOB BizSmart offers a suite of curated digital solutions for SMEs to drive business efficiency and growth, covering accounting, HR/Payroll, POS or Payment, logistics and more. These solutions help equip businesses to navigate daily challenges while effectively positioning them for long-term success in today’s competitive business environment. Connect now with our digital advisors to learn more.

To support businesses to be more energy efficient, UOB has three decarbonisation solutions: U-Energy, offering businesses flexible financing options and access to qualified energy service companies, U-Solar, an integrated financing platform for solar energy, and U-Drive, an integrated value chain solution for the electric vehicle ecosystem.

To find out more about our suite of products and services and how they can help you manage your business challenges, access the UOB SME app or visit any UOB branch.

*For enquiries that reach UOB within the Stipulated Timing, we will contact you by the next Business Day with an indicative loan amount that you may apply for. “Business Day” is defined as Mondays to Fridays (Singapore date and time, and excluding Singapore and bank public holidays). “Stipulated Timing” is defined as 8am to 8pm from Mondays to Saturdays (Singapore date and time, and excluding Singapore and bank public holidays). For enquiries that reach UOB at times other than the Stipulated Timing, we will contact you within two Business Days after UOB receives your enquiries, with an indicative loan amount that you may apply for.

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