How Singapore SMEs Can Use PSG, EDG & SFEC Grants to Fund AI Automation
Singapore service businesses can fund AI automation at up to 50% co-funding through PSG (off-the-shelf tools) or EDG (custom-built systems) — and stack a further SGD 10,000 SkillsFuture Enterprise Credit (SFEC) on top to cover most of the remaining co-pay. Used together, a qualifying SME can reduce the effective cost of an AI automation project to near-zero. This guide explains which grant applies to your project, how to stack them correctly, and the deadlines you cannot miss.
Key Takeaways
- PSG covers pre-approved off-the-shelf tools (CRMs, chatbots) at up to 50% co-funding — it does not cover custom builds
- EDG covers custom-built AI automation systems at up to 50% co-funding — the right scheme for bespoke WhatsApp pipelines and AI lead agents
- SFEC (SkillsFuture Enterprise Credit) gives qualifying employers a SGD 10,000 top-up that stacks on PSG or EDG — SFEC expires 30 November 2026
- Stacking EDG + SFEC on a SGD 6,000 project can reduce your effective out-of-pocket cost to approximately SGD 300
- PSG, EDG, and MRA are being consolidated into a new EDGE programme launching 2H2026 — apply now before the transition
Scheme 1: The Productivity Solutions Grant (PSG)
Administered by: Enterprise Singapore (ESG) + Infocomm Media Development Authority (IMDA) Co-funding rate: Up to 50% of qualifying costs Who can apply: Singapore-registered SMEs with at least 30% local shareholding and annual turnover under S$100 million (or fewer than 200 employees)
What PSG Covers
PSG supports adoption of pre-approved IT solutions — specifically, vendors and software packages that have been assessed by the government as productivity-enhancing. These include CRM systems, customer service chatbots, digital marketing automation tools, and HR software.
For AI automation purposes, the most relevant PSG-eligible solution categories include:
- Customer Management solutions — CRM platforms including HubSpot, Zoho CRM, and Salesforce (with approved vendors)
- Sales Automation tools — including some workflow automation and lead management platforms
- Customer Service Chatbots — AI-powered chat systems that handle inbound enquiries
What PSG Does NOT Cover
PSG does not cover custom-built systems. If you need a bespoke AI agent built around your specific workflow, product knowledge, and communication style — rather than adopting an off-the-shelf tool — PSG is not the right scheme.
Custom builds fall under EDG (see below).
How to Apply for PSG
- Check eligibility: Confirm your business meets the criteria on the Business Grants Portal (BGP) at
businessgrants.gov.sg - Choose a pre-approved vendor: Solutions must be purchased from an IMDA-approved vendor. The full list is searchable on the BGP.
- Get a quotation: Obtain a formal quotation from the approved vendor.
- Submit the application: Apply through the BGP before making any payment. Retroactive applications are not accepted.
- Receive approval: Approval typically takes 4–6 weeks.
- Implement and claim: Deploy the solution, then submit the claim with evidence of payment within the PSG claim window.
Scheme 2: The Enterprise Development Grant (EDG)
Administered by: Enterprise Singapore (ESG) Co-funding rate: Up to 50% for most SMEs (higher rates possible for qualifying businesses during specific periods) Who can apply: Singapore-registered SMEs, similar eligibility to PSG but assessed on a project basis
What EDG Covers
EDG supports strategic business transformation projects, including custom digital systems, process redesign, and technology integration. Unlike PSG, EDG does not require using a pre-approved vendor list — it funds the project outcome, not a specific product.
For AI automation, EDG is the more relevant grant when you need:
- A custom AI agent built for your specific service, workflow, and brand voice
- WhatsApp outreach automation integrated with your CRM and approval workflow
- Lead qualification systems designed for your specific enquiry types and qualifying criteria
- End-to-end pipeline automation across multiple tools (WhatsApp, CRM, calendar, Telegram notifications)
- Consulting and process redesign work that precedes the technical build
EDG covers eligible project costs including:
- Third-party consultant and vendor fees
- Software and platform costs specific to the project
- Staff costs for internal project involvement (subject to caps)
How to Apply for EDG
- Pre-project consultation: Engage an Enterprise Singapore Business Advisor to discuss your project scope. This is free and available at SME Centres across Singapore.
- Identify an approved vendor: For EDG, you can work with any qualified technology vendor, but the vendor should ideally have experience with EDG-funded projects and can help prepare documentation.
- Prepare a project proposal: EDG requires a structured proposal covering business objectives, the problem being solved, the proposed solution, expected outcomes, and a detailed budget.
- Submit via BGP: Apply at
businessgrants.gov.sgbefore project commencement. Do not start implementation before approval. - Implement with documentation: Maintain records of all project activities, costs, and outcomes throughout the project.
- Submit claim: After project completion, submit the claim with supporting documentation (invoices, bank statements, screenshots of deliverables).
Scheme 3: SkillsFuture Enterprise Credit (SFEC) — Stack This on Top
Administered by: SkillsFuture Singapore (SSG) + Enterprise Singapore Amount: SGD 10,000 one-off credit per eligible employer Sub-limit for enterprise transformation: Up to SGD 7,000 of the credit can be applied against PSG or EDG costs Hard deadline: 30 November 2026 — all claims must be filed by this date
What SFEC Is
SFEC is not a standalone grant — it is a top-up credit that reduces your out-of-pocket expenses after your base grant (PSG or EDG) has already been applied. It covers up to 90% of the remaining co-payment.
Most SMEs who received PSG or EDG funding between 2020–2024 have unused SFEC credit sitting on their account. It is auto-allocated — you do not apply for it separately. You simply claim it when filing your PSG or EDG claim.
Who Qualifies for SFEC
- Employers who contributed at least SGD 750 in Skills Development Levy (SDL) over the qualifying period
- Employed at least 3 Singapore Citizens or PRs monthly
- Credit was auto-notified to eligible employers — check your CorpPass account or call SSG at 6785 5785
The Stacking Example
Here is what PSG + SFEC or EDG + SFEC looks like in practice for a typical AI automation project:
Scenario: Custom AI lead agent build — SGD 6,000
| Step | Amount |
|---|---|
| Project cost | SGD 6,000 |
| EDG co-funding (50%) | − SGD 3,000 |
| Your cash outlay after EDG | SGD 3,000 |
| SFEC covers 90% of your outlay | − SGD 2,700 |
| Effective net cost to you | ~SGD 300 |
The SFEC credit balance (SGD 10,000) also covers up to SGD 3,000 of the enterprise transformation sub-limit, so even a larger SGD 20,000 project gets meaningfully offset after EDG.
File SFEC claims before 30 November 2026. Any unused SFEC credit after that date is forfeited.
PSG vs EDG: Which Is Right for Your Business?
| Situation | Recommended Grant |
|---|---|
| Adopting an existing CRM (HubSpot, Zoho) | PSG |
| Building a custom AI lead response agent | EDG |
| Deploying an off-the-shelf chatbot from an approved vendor | PSG |
| Designing and automating a full lead-to-client pipeline | EDG |
| Upgrading from a spreadsheet to a pre-approved CRM | PSG |
| Building WhatsApp sequences integrated with your workflow | EDG |
Many businesses use both schemes on different projects — PSG for the CRM platform adoption, EDG for the custom AI system built on top of it. Add SFEC on top of either and your effective cost drops significantly.
Full Stack: PSG + SFEC or EDG + SFEC
| Grant Combination | Best For | Effective Cost (SGD 6,000 project) |
|---|---|---|
| PSG only | Off-the-shelf tool adoption | SGD 3,000 |
| EDG only | Custom AI automation build | SGD 3,000 |
| PSG + SFEC | Off-the-shelf tool + SFEC top-up | ~SGD 300 |
| EDG + SFEC | Custom build + SFEC top-up | ~SGD 300 |
Important: PSG, EDG, and MRA Are Being Replaced by EDGE in 2H2026
Enterprise Singapore has announced that PSG, EDG, and the Market Readiness Assistance (MRA) grant will be consolidated into a single programme called EDGE (Enterprise Digitisation and Growth Engine), launching in the second half of 2026.
What this means for you:
- PSG, EDG, and MRA remain fully accessible and are processing normally until EDGE launches
- Specific EDGE eligibility rules, funding rates, and caps have not yet been published
- Transitions between government grant programmes historically cause processing delays as systems and criteria migrate
Recommendation: apply for any pending PSG or EDG projects now. Do not defer an application waiting for EDGE — you risk the transition window. If your project is ready, file through the Business Grants Portal at businessgrants.gov.sg today.
Common Grant Application Mistakes
Starting implementation before approval: Both PSG and EDG require you to apply and receive approval before committing any project costs. Starting work before approval disqualifies the project.
Applying retroactively: You cannot claim a grant for a system you already built. Applications must pre-date project commencement.
Inaccurate scope documentation: EDG proposals with vague or unrealistic scope statements are commonly rejected. Specific outcome targets (e.g., "reduce lead response time from 4 hours to under 5 minutes") and clear project phases improve approval rates.
Wrong vendor category: For PSG, the vendor must be on the approved list for the specific solution category. Purchasing from a non-listed vendor means the solution is not PSG-claimable, even if the product is good.
Getting Help With the Application
Grant applications, particularly for EDG, require documentation that is specific about business impact and project scope. If you are considering a custom AI automation build and want to explore grant-funding options, the process is:
- Start with a workflow review — map your current process and identify what a custom system would handle
- Define the project scope and expected business outcomes (hours saved, leads converted, revenue impacted)
- Assess which grant scheme fits the project
- Engage an Enterprise Singapore advisor or a vendor experienced in EDG documentation
Lumora works with clients on EDG-funded AI automation projects. If you're evaluating options with a leading AI agent development company in Singapore, during a discovery consultation we can help you understand whether your planned project qualifies, what documentation Enterprise Singapore typically expects, and how to scope the project for a strong application.
Book a free 30-minute consultation to discuss your automation goals and explore custom AI agent development services relevant to your business.
Grant Deadlines to Track
| Grant | Key Deadline | Action |
|---|---|---|
| SFEC | 30 November 2026 — hard expiry | File claims before this date or credit is forfeited |
| PSG / EDG / MRA | Before EDGE launches (2H2026) | Apply now — do not wait for EDGE transition |
| EDG (project-based) | Apply before project commences | No retroactive claims accepted |
Note: Grant terms, co-funding rates, and eligible solution categories change periodically. Always verify current terms at businessgrants.gov.sg before applying. This article reflects guidance as of August 2026, including Budget 2026 updates and the EDGE programme announcement.