By CHUANG PECK MING

IT APPEARS that every business can do with some help from government right now, when banks are not lending and consumers are not spending. Singapore companies venturing abroad are no exception.

Despite the downturn, these companies 'remain financially sound and are in a good position to capitalise on emerging opportunities', says Khoo Wee Lin, an assistant director at International Enterprise (IE) Singapore.

There are golden opportunities overseas amid the challenging economic climate, but local companies face two basic problems, she says - a lack of financing options because of the credit crunch, and higher counter-party risk.

IE, which is pushing Singapore companies to go international, has therefore beefed up existing schemes and introduced new ones to help out.

'To address gaps in commercial funding, due to the credit crunch and heightened risk aversion among financial institutions, we have increased the loan cap from $15 million to $50 million under our Internationalisation Finance (IF) Scheme,' says Ms Khoo, who is with IE's capability development group.

'This significant increase in loan cap per borrower group aims to plug gaps in the existing system so credit can continue to flow to willing and able companies, as well as benefit those that are in need of larger loans for overseas expansion plans,' she says.

The scheme has also been enhanced to allow refinancing, which will encourage financial institutions to support refinancing requests through risk-sharing with the government.

With the enhancements, IE expects to support about $1.6 billion of loans under the IF Scheme.

A new scheme, the Loan Insurance Scheme Plus, complements the existing Loan Insurance Scheme run jointly by IE and Spring Singapore, offering larger tranches of trade finance lines to businesses. Under this scheme, companies can access up to $15 million of trade finance lines 'per borrower group'.

Providing better access to additional trade credit insurance coverage for Singapore companies, IE also has a new Export Coverage Scheme (ECS). This was launched as part of the government's Special Risk-sharing Initiative and is expected to back up to $4 billion in trade turnover.

ECS could benefit about 1,000 Singapore-based companies, says Ms Khoo. 'With heightened uncertainties in the global economic climate, companies are more cautious about credit risks and are increasingly keen to obtain trade credit insurance to protect themselves against buyer default,' she says. 'As such, IE has worked with a pool of insurers to design a market-driven solution, ECS, to help Singapore-based companies access a higher quantum of insurance cover against buyer default.'

Ms Khoo says Singapore companies striving to expand their global footprint should continue to build their capabilities, especially in four areas - branding, design, intellectual property and manpower.

'Developing these capabilities is essential as they can help companies differentiate themselves from competitors and better sustain their businesses in the long run,' she says. 'Many companies all over the world may offer similar products and services, so these capabilities will serve as a differentiating factor or value proposition.'

In April last year, IE launched the Internationalisation Capability Development Programme (iCDP) to help Singapore companies build long-term capabilities to sharpen their competitive edge in global markets.

'The iCDP supports the development of a broad range of firm-level capabilities for the purpose of overseas expansion,' Ms Khoo says. 'Examples of such capabilities include branding, design, intellectual property, manpower, franchising, financing, joint venture, market studies and e-commerce. The capabilities are supported on a per project basis via third-party consultants or in-house experts.'

IE recently raised the level of support under the scheme. Previously, it picked up 30-50 per cent of the cost of manpower, hardware and software, engagement of third-party consultants and acquisition of intellectual property. With the enhanced scheme, which took effect on Feb 1, support has risen to 50-70 per cent.

'Besides the higher support level, we are providing grant support to companies for air fares and accommodation when they participate in overseas bidding projects and set up a presence overseas,' Ms Khoo says. These grants are capped at two representatives.

Given that most Singapore companies are relatively small and lack the critical mass to break into large foreign markets, IE encourages them to pool their resources and team up when they strike out.

Its iPartners Programme foots part of the qualifying bill for a project. 'The support level is variable and determined by IE, up to the maximum support level indicated for each type of eligible expenses,' Ms Khoo says.

From Feb 1, the length of support under the programme has been extended from 18 to 24 months. The enhancement is valid for two years.

So far, iPartners has supported 34 consortiums involving 167 companies, spanning industries such as automotive, optics, airport services, building and infrastructure, health care, homeland security, e-government, supply chain and logistics.

'The projected overseas sales of these alliances are $3.27 billion when fully realised,' Ms Khoo says. 'Progressively, we have seen an increasing readiness and willingness to partner and share resources among Singapore companies.'

Many small and mid-size enterprises have come to realise that the consortium approach is an attractive market-entry strategy because of the benefit of economies of scale, she says.

This article was first published in The Business Times.