SMEs ‘Screaming for Help’: Global Calls Intensify for Budget Support Amid Rising Costs and Overseas Expansion Push

As operational pressures mount and international markets beckon, small and medium-sized enterprises worldwide demand enhanced government financing and internationalisation schemes to survive and thrive

In boardrooms and workshops from Singapore to Stockholm, the cry for help echoes with increasing urgency. Small and medium-sized enterprises (SMEs)—the backbone of global economies—find themselves caught in a vice between relentless cost inflation and the imperative to expand internationally. As governments prepare their 2026 budgets, panellists, business leaders, and policy experts are making an unambiguous case: without substantial SME budget support, particularly for reducing SME operational costs and facilitating overseas expansion, the economic engine that powers job creation and innovation risks stalling.

The timing couldn’t be more critical. Recent data from the World Bank reveals a staggering $5.7 trillion global SME finance gap, with 40% of formal micro, small, and medium enterprises credit-constrained—19% fully and 21% partially. This financial squeeze arrives precisely when SMEs need capital most: to absorb rising costs, invest in digital transformation, and seize growth opportunities in international markets.

The Cost Crunch Facing SMEs

The operational landscape for small businesses has transformed dramatically. According to recent surveys, 51% of SMEs report increased business insurance costs over the past 12 months, with 10% describing the rise as “dramatic.” These insurance pressures compound broader inflationary headwinds affecting everything from raw materials to utilities and wages.

“SMEs are facing an unprecedented convergence of cost pressures,” explains analysis from the Singapore Business Federation’s Budget 2026 recommendations. “To reignite growth amid rising costs and global uncertainty, businesses, particularly SMEs, need stronger support to innovate, scale and expand overseas.”

The data paints a stark picture of the challenges:

• Energy costs: Persistent electricity tariff hikes are creating unavoidable core operational expenses, particularly in manufacturing and service sectors
• Labor expenses: Wage pressures driven by tight labor markets and minimum wage increases across multiple jurisdictions
• Supply chain disruptions: Bottlenecks continue to drive up procurement costs and create inventory management challenges
• Compliance burdens: Expanding regulatory requirements increase administrative costs disproportionately for smaller firms

For many SMEs, these mounting pressures are eroding already-thin profit margins. Government financing for small businesses has never been more essential to bridge the gap between survival and sustainable growth.

Calls for Enhanced Internationalisation Support

While domestic cost pressures mount, the imperative for international expansion has intensified. OECD research demonstrates that SMEs engaged in global value chains tend to be more productive, generate higher revenues, and gain access to innovation networks—yet they account for only 20-40% of total exports in most OECD economies despite representing 95% of all firms.

The case for robust internationalisation schemes for SMEs rests on compelling evidence. SMEs that successfully expand internationally don’t just survive—they thrive, accessing larger customer bases, diversifying revenue streams, and building resilience against domestic economic fluctuations. Yet the barriers remain formidable: information gaps, limited access to trade finance, regulatory complexity in foreign markets, and the sheer fixed costs of international operations.

Singapore’s approach offers instructive lessons for policymakers globally. The city-state’s recent Budget 2025 extended the Market Readiness Assistance (MRA) Grant to March 31, 2026, maintaining support of up to S$100,000 per new market. This program covers critical expenses including overseas market research, promotional activities, business development, and market setup—precisely the cost categories that deter many SMEs from international ventures.

“The enhanced grant cap extension ensures that SMEs in Singapore have sufficient support to consider and explore expansion overseas,” notes industry analysis. Singapore’s approach also includes the Double Tax Deduction for Internationalisation (DTDi) scheme, now extended to December 2030, offering a 200% tax deduction on qualifying market expansion expenses.

Global Policy Responses: A Mixed Picture

Governments worldwide are responding to SME pleas with varying degrees of ambition and effectiveness. The European Union’s approach through the EUIPO SME Fund 2026, which opened February 2, 2026, exemplifies targeted intellectual property support. The program offers:

• €700 vouchers for trademark and design registration (75% reimbursement for EU applications, 50% for international)
• €3,500 for patent applications (75% reimbursement for national patents and EPO filing/search fees, plus 50% for legal drafting costs)
• €1,500 for plant variety protection
• €1,620 for IP diagnostic services

This approach recognizes that SME overseas expansion grants must address the full spectrum of internationalization challenges, including intellectual property protection—a critical concern when entering new markets.

Yet funding allocation remains woefully inadequate relative to need. The IFC’s MSME Finance Forum research indicates that the global SME credit gap has grown by more than 6% annually between 2015 and 2019, even as credit supply increased by 7%. Women-owned SMEs face particularly acute challenges, confronting a $1.9 trillion financing gap representing 34% of the total.

Essential Measures That Could Make a Difference

Panellists and policy experts have coalesced around several key interventions that could materially improve SME prospects:

1. Enhanced Access to Government Financing Facilities

Singapore’s expansion of the Enterprise Financing Scheme (EFS) – Trade Loan cap from S$5 million to S$10 million represents the type of scaled response required. Trade finance remains critically important for SMEs entering new markets, where payment terms can strain cash flow and expose businesses to foreign exchange risks.

The World Bank’s research on SME finance emphasizes that effective government interventions must:

• Prioritize the development of robust enabling environments for both debt and equity financing
• Encourage fintech solutions while ensuring adequate risk mitigation
• Adopt evidence-based, data-driven approaches to targeting underserved segments
• Implement rigorous monitoring and evaluation frameworks

2. Comprehensive Internationalisation Ecosystems

Effective support extends beyond grants. Best-practice SME financing constraints solutions include:

• Market intelligence platforms providing real-time data on overseas opportunities
• Trade missions and business matching programs connecting SMEs with partners in target markets
• Export credit insurance reducing payment risk in unfamiliar markets
• Regulatory navigation assistance helping SMEs understand compliance requirements
• Digital trade facilitation lowering barriers through e-commerce platforms

The OECD’s analysis highlights that “the digital transformation is reducing trade costs, increasing SME involvement in trade, and spawning a new breed of born-global enterprises.” Government policies must harness these technological opportunities.

3. Targeted Cost Relief Measures

Singapore’s 50% corporate income tax rebate for 2025 (minimum S$2,000 for active businesses with local employees) exemplifies direct cost relief. Combined with the Progressive Wage Credit Scheme covering 40% of 2025 wage increases and 20% of 2026 increases, such measures provide breathing room for SMEs to invest in growth rather than merely survive.

4. Innovation and Technology Adoption Support

Deloitte Singapore’s Budget 2026 recommendations call for measures helping companies “better manage volatility while pursuing strategic expansion,” including more flexible loss carry-back frameworks and enhanced capability-building under innovation schemes. The allocation of S$150 million to the Enterprise Compute Initiative for AI adoption recognizes that technological competitiveness increasingly determines which SMEs can scale internationally.

The Productivity Imperative

The stakes extend far beyond individual business survival. World Bank research demonstrates that closing SME financing gaps could unlock aggregate productivity gains of up to 86% in middle-income economies. SMEs account for more than 50% of employment in emerging markets and developing economies—their success or failure ripples through entire communities.

Yet productivity gains require investment. SMEs need capital not just to maintain operations but to:

• Adopt digital tools and automation
• Upskill workers for evolving market demands
• Implement sustainable business practices increasingly required by consumers and regulators
• Build resilient, diversified supply chains
• Develop intellectual property that creates competitive moats

Looking Forward: From Crisis Response to Strategic Investment

The question facing policymakers as they finalize 2026 budgets is whether they view SME support as crisis relief or strategic investment. The evidence overwhelmingly supports the latter framing.

Countries with more generous and well-designed internationalisation schemes for SMEs consistently see stronger export performance, productivity growth, and economic resilience. Germany’s specialized manufacturing SMEs, for example, hold 70-90% of global market share in certain segments and account for the bulk of Germany’s trade surplus—a testament to what’s possible when small firms receive sustained support to compete globally.

The current moment demands comprehensive policy responses that address both immediate cost pressures and longer-term competitiveness. This means:

Short-term relief: Tax rebates, wage subsidies, and streamlined access to working capital to help SMEs navigate current headwinds

Medium-term enablement: Enhanced grants for market entry, trade finance facilities, and support for digital transformation

Long-term ecosystem building: Investment in trade infrastructure, skills development, regulatory harmonization, and innovation networks

The Path Ahead

As SMEs across the globe raise their voices—sometimes in desperation, increasingly in unified advocacy—governments face a defining choice. The $5.7 trillion financing gap won’t close through marginal adjustments or business-as-usual policies. It requires bold, sustained commitment to government financing for small businesses coupled with comprehensive reducing SME operational costs initiatives.

The panel discussions, policy recommendations, and budget submissions proliferating across capitals worldwide share a common thread: SMEs don’t need charity—they need partnership. They need governments that recognize small businesses as not merely beneficiaries of support but engines of prosperity deserving strategic investment.

For countries willing to answer the call with ambitious SME budget support measures and enhanced SME overseas expansion grants, the rewards are substantial: more resilient economies, higher productivity, expanded exports, and communities where entrepreneurship flourishes. For those that ignore the screams for help, the alternative is grimmer: stunted growth, concentrated economic power, and missed opportunities to harness the innovation and dynamism that only vibrant small business sectors provide.

The choice belongs to policymakers preparing their budgets today. The consequences will echo for decades.