Singapore's 2020 Budget: How Does it Affect Hawker Centres, Restaurants and Singapore's F&B Industry?
How much money can your F&B business get from Singapore's 2020 budget?
08 Mar 2020
F&B
Singapore
快速瀏覽
- Which Industries Have Been Hit Hardest by the Coronavirus
- What is the Singaporean Government Promising in the 2020 Budget
- How Badly has COVID-19 Affected Restaurants in Singapore
- CBD
- Tanjong Pagar:
- Cecil Street
- How Badly has COVID-19 Hit Singapore Hawker Stall Businesses
- Amoy Street Food Centre:
- Tekka Market
- Hong Lim Food Centre
- Haig Road Food Centre
- 2020 Budget and Singapore Hawker Centres
- 2020 Budget and Singapore Restaurant Businesses
- Eligible businesses must meet the following three guidelines as per the Singapore Government's own website
- 2020 Budget and Singapore F&B Employee Retention
- 2020 Additional Finance Options for Singaporean F&B Businesses
- Moving Forward
Which Industries Have Been Hit Hardest by the Coronavirus?
In just about every country affected by the new COVID-19 virus, many industries have been hard-hit. Reasons for this range from home office schemes by companies, social distancing (including ban on large gatherings), mandatory self-isolation and the closing of borders. In Singapore, a prominent example of a hard-hit industry is F&B. This was most noticeable after the "Singapore Government moved the DORSCON status to Orange" to try to limit the spread of the virus.
What is the Singaporean Government Promising in the 2020 Budget?
In order to meet National Development Minister Lawrence Wong's promise for a 'strong budget', here's what the Singapore government is promising:
1. A S$4 billion Stabilisation and Support Package to support enterprises through the current economic state
2. Additional support for businesses in five sectors that are hit hardest by the outbreak of COVID-19, namely tourism, aviation, retail, food services and point-to-point land transport services
4. In the retail and F&B sectors, hawker stall owners and commercial tenants in Government-owned facilities can also expect rental waivers, amounting to S$45 million in total.
5. Finance Minister Heng also announced a new Temporary Bridging Loan Programme with a loan quantum of up to S$1 million, capped at 5% interest, to provide better cash flow for businesses.
How Badly has COVID-19 Affected Restaurants in Singapore?
Quite simply, even as recently as two weeks ago, restaurants have been seeing their sales plummet. Below are a few examples based on several interviews:
CBD:
Restaurant sales down by anywhere between 10% and 50% among the 13 eateries and retailers in the area.
Tanjong Pagar:
Restaurant sales down by between 20% and 30% according to Tomy Chen, the co-owner of Pho Stop at Downtown Gallery
Cecil Street:
Restaurant sales down by 45-55% according to Mr Willin Low, owner of Relish@Frasers Tower
How Badly has COVID-19 Hit Singapore Hawker Stall Businesses?
Hawker stalls have seen sales plummet by up to 50%. This is because "people stopped wanting to eat at hawker centres. It is the worst place to be, because people are sitting near each other."
Amoy Street Food Centre:
Hawker stall sales down by 20%. However, delivery helps to offset 10% of the loss according to Lum Von-Nie, who runs the Basil & Mint hawker stall.
Tekka Market:
Haig Road Food Centre:
Hawker sales slump leads to "a lot of food left at the end of the day" according to Mr. Omar, a 58-year-old hawker.
2020 Budget and Singapore Hawker Centres
As part of Singapore's 2020 government budget, a specific section was devoted to hawkers and hawker centres in Singapore. According to Finance Minister Heng Swee Keat, all hawker stalls in centres managed by the National Environmental Agency (NEA) will receive their hawker centre"rental fees waived for a month, with a minimum waiver of S$200."
While this is certainly a helpful gesture by the Singaporean government, it is important to note that social enterprise hawker centres do not appear to be getting any government aid. Such hawker centres include Ci Yuan Hawker Centre and Pasir Ris Central Hawker Centre.
2020 Budget and Singapore Restaurant Businesses
Any Singapore restaurant businesses operating in government-owned or managed facilities will receive a half month rent waiver. The relevant government agencies offering this rent waiver include the : Housing and Development Board (HDB), People's Association (PA), Singapore Land Authority (SLA), Jurong Town Corporation (JTC), Urban Redevelopment Authority (URA), Singapore Tourism Board (STB), NParks and Sentosa Development Corporation (SDC). The waiver will also only apply to Singaporean restaurant businesses who are on leases under three years, and who do not pay Property Tax.
For SME restaurant businesses that require additional finance options from the government, there is also an enhancement to The Enterprise Financing Scheme - SME Working Capital Loan (EFS-WCL). The period to apply for this loan is extended to March 2021 and "the maximum loan quantum was raised from $300,000 to $600,000. Risk-share was also increased to up to 80% (from 50% to 70%)." There will be a 5-year maximum repayment period.
Eligible businesses must meet the following three guidelines as per the Singapore Government's own website:
2. At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
3. Maximum Borrower Group revenue cap of S$500 million for all enterprises
2020 Budget and Singapore F&B Employee Retention
In order to help Singapore businesses, including those in the F&B sector, retain their employees, the government has set up the Jobs Support Scheme. This scheme is applicable to any business that employs Singaporean citizens and PRs. Those who apply will receive "an 8% cash grant on the gross monthly wages of each local employee for the months of October 2019 to December 2019, subject to a monthly wage cap of $3,600 per employee." Anyone who is eligible for this scheme will automatically receive the "JSS payment from the Inland Revenue Authority of Singapore (IRAS) by 31 July 2020."
2020 Additional Finance Options for Singaporean F&B Businesses
The Helping Our Promising Enterprises (Hope) Fund is a "S$5 million fund to provide financing help for local enterprises hit by the impact from the virus outbreak." Uniquely it is being set up by young leaders from six of Singapore's most prominent business families. The founding companies include "Goldbell Group, Apricot Capital, Ho Lee Group, Paradise Group, Sing Lun Group and Soilbuild Group, in partnership with the Singapore Business Federation Young Business Leaders Network (SBF-YBLN)."
The fund will focus on local Singaporean SMEs and offer short-term working capital loans for up to 12 months. "The fund will offer a fixed loan of S$50,000 per company, and will offer a lending rate starting at 0.5 per cent per month, but at no more than 0.75 per cent per month." This rate is much lower than standard industry rates which can be up to 36 times higher.
In order to qualify for this fund, companies must pay a S$80 fee and have been locally incorporated in Singapore for "more than 12 months, have at least 30 per cent Singaporean shareholding and a minimum paid-up capital of S$25,000."
Applications can be sent in from Feb 26th onward.
Moving Forward
There are several options available to aid F&B businesses during these tough times thanks to Singapore's 2020 budget. Check whether your business is eligible for any of the above financial aid measures or rent reductions and take advantage of them as soon as possible. The Restaurant Association of Singapore is also in talks with shopping mall landlords for "a rental rebate" that could help F&B businesses even further. Already, Jewel Changi Airport has "offered its tenants a 50 per cent rental rebate for February and March."
