How Singapore SMEs Can Use PSG & EDG Grants to Fund AI Automation | Lumora Blog | Lumora

One of the most common reasons Singapore service business owners delay building an AI automation system is cost. A well-built custom system — one that handles lead response, follow-up sequences, CRM integration, and proposal generation — typically costs S$3,000–15,000 depending on complexity.

What many business owners do not realise is that the Singapore government provides co-funding grants that can reduce this cost by 50% or more.

This guide explains the two most relevant schemes — the Productivity Solutions Grant (PSG) and the Enterprise Development Grant (EDG) — how they apply to AI automation projects, and what you need to do to access them.

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.sg before 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).

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.

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. 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 grant options relevant to your business.

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 general guidance as of mid-2026.