United Global was preparing for a Catalist board listing last year when it realised that the small family business had grown to become a larger enterprise but lacked the framework, policies and processes to manage potential risks.
Managers at the lubricant manufacturer turned to Spring Singapore, which helped the company identify gaps in its business model.
Director and chief executive officer Jacky Tan said the company then joined an initiative by Spring Singapore and the Singapore Exchange (SGX) which helps small and medium-sized enterprises (SMEs) build and manage their financial capabilities.
United Global was directed by SGX and Spring to a risk management consultant, who recommended more than 30 ways to improve its credit control, manage cash flow and inventory and improve human resource policies.
Now that the company has made its debut on the stock exchange, Mr Tan believes it has "built a strong foundation in corporate governance and accountability... in order to prepare us for the next growth phase as a listed company on the Singapore Exchange".
United Global is among a sizeable number of SMEs that have benefited in the past year from the collaborative efforts by SGX and Spring to help them strengthen their finances to withstand market vagaries.
The Capability Development Grant (CDG) enables firms to upgrade their capabilities by defraying up to 70 per cent of costs.
"Bad things can happen to good companies if they are not managed well," Mr Mohamed Nasser Ismail, head of equity capital market (SME) and head of capital market development at SGX, said.
"The idea (behind the CDG) is to help companies withstand more complex business operations, and ensure they have processes and systems in place to make sure they remain robust."
Spring's support mechanisms and SGX's private-sector expertise in financial management - necessary for tapping capital markets - have allowed many SMEs to upgrade their financial capabilities.
One beneficiary is Acromec, a specialist engineering services provider in the field of controlled environments. Acromec, which was planning a Catalist listing last September, decided to apply for the grant to improve its listing process.
"We utilised the CDG to do a review of our internal control process through engaging a professional accounting firm," said executive chairman and managing director Lim Say Chin.
The firm was also advised on strategies to handle potential issues and questions that may arise when engaging the public, media and analysts. Acromec was listed in April. "We are grateful to Spring and SGX for putting together such a supportive scheme," Mr Lim said.
ISOTeam, a building maintenance and estate upgrading company, also benefited from the CDG, using it to enhance corporate governance and investor relations.
Besides embarking on a skills- and competency-building exercise for its employees, the Catalist-listed company conducted informal sessions with investors to get feedback.
It also publicised plans for overseas expansion among the local investment community via traditional media, said chief executive Anthony Koh. "Further down the road, we plan to tap the grant for various educational and outreach programmes to investors as well," he said.
SGX hopes these success stories will translate into more companies signing up for the grant.
"This is a good beginning," Mr Nasser said. "The level of interest in the CDG is increasing."