What Do EDG & PSG Grants Cover? Who Can Apply? (Singapore SME Guide)

Singapore SMEs planning a digitalization project often hit the same wall early: which grant applies, what it actually pays for, and whether their business even qualifies. The Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG) are the two most commonly referenced schemes, but they serve different purposes and have different rules. This guide breaks down coverage and eligibility in plain terms, so you can figure out — before you talk to a vendor or a consultant — whether a grant is realistically part of your funding picture.

This is general guidance, not a substitute for checking current terms on the official Enterprise Singapore and GoBusiness Gov Assist portals. Grant rules, caps, and support levels change, and every application is subject to approval on a case-by-case basis, based on current 2026 scheme conditions.

What is the difference between EDG and PSG?

EDG funds larger, customized transformation projects — including bespoke software builds — while PSG funds smaller, pre-scoped, off-the-shelf IT solutions from a pre-approved vendor and solution list. EDG is project-based: you (or your vendor) submit a proposal describing what you want to build and why, and Enterprise Singapore assesses it individually. PSG is catalogue-based: you pick a pre-qualified solution — like a specific accounting package or POS system — from a published list, and the grant support is largely pre-determined.

This distinction matters most for custom software. If you're building something tailored to your specific operations — a custom inventory system, a bespoke ERP module, an integration between systems that don't normally talk to each other — that typically falls under EDG's scope, not PSG's, because PSG is built around standardized, repeatable solutions rather than one-off development work.

What costs does EDG actually cover?

EDG can support up to 50% of qualifying project costs, covering categories like third-party consultancy fees, software and equipment directly tied to the project, and in some cases internal manpower costs for the project team. "Qualifying costs" is the operative phrase — not every line item in a project quote counts. Costs typically need to be clearly tied to the transformation outcome (e.g., a new digital workflow, an automated process, a system that measurably changes how the business operates), rather than routine operating expenses or hardware unrelated to the project's core objective.

For a custom software build, qualifying costs commonly include:

• Vendor development fees for the scoped project (design, build, testing, deployment)
• Project management and consultancy fees tied to the transformation
• Specific software licenses or infrastructure required for the project to function

What's usually excluded: general office equipment, ongoing subscription costs unrelated to the specific project, and costs incurred before the grant application is approved. This last point trips up a lot of applicants — starting work before approval can jeopardize funding for costs already spent, so timing the application relative to your project kickoff matters.

The up-to-50% figure is a ceiling, not a guarantee. Actual support levels depend on the project's assessed merit, the applicant's profile, and current scheme parameters — all of which are confirmed only at approval, not at submission.

What costs does PSG actually cover?

PSG supports up to 50% of costs for pre-approved, off-the-shelf IT solutions and equipment, capped per solution category, and is meant for standardized adoption rather than custom development. Because PSG solutions are pre-vetted, the application process is generally faster and simpler than EDG — you're adopting something that's already on the list, not proposing a new build.

This is precisely why PSG usually isn't the right fit for custom software projects. If your business needs a system built around your specific processes rather than a configuration of an existing packaged product, you're outside PSG's design intent. Businesses sometimes discover this only after starting the PSG application process, which wastes time better spent preparing an EDG submission instead.

If part of your project does involve adopting a recognized off-the-shelf tool (e.g., a standard accounting or HR platform) alongside custom development work, it's worth checking whether that specific component could be handled separately under PSG while the bespoke portion goes through EDG. This isn't always straightforward and depends on how the two schemes' rules apply to a mixed project — confirm with Enterprise Singapore or a grant consultant before assuming it's possible.

Who is eligible to apply for EDG or PSG?

Eligibility generally requires the business to be registered and operating in Singapore, with at least 30% local shareholding (Singaporean or PR ownership), and to meet group annual sales or headcount thresholds that qualify it as an SME. Beyond that baseline, both schemes typically also expect the business to be in a reasonably sound financial position to carry out the project — grants co-fund costs, they don't pre-pay them, so the applicant needs to fund its share and cash-flow the rest until reimbursement.

Common eligibility markers to check before applying:

• Registration: Business entity registered and operating in Singapore
• Local shareholding: At least 30% held by Singapore citizens or permanent residents
• Company size: Meets the SME definition under the scheme's current sales/headcount thresholds
• Project relevance: The proposed project must align with the scheme's objective (genuine transformation for EDG; adoption of a listed solution for PSG)

These thresholds are exactly the kind of detail that gets adjusted between budget cycles. Don't rely on a figure you read somewhere last year — verify current shareholding, sales, and headcount criteria directly against the 2026 scheme guidelines before you invest time preparing a proposal.

Does the software vendor need to be pre-approved to qualify for EDG?

No — unlike PSG, EDG does not require selecting from a pre-approved vendor list, because EDG evaluates the project itself rather than certifying vendors in advance. This is a distinction worth understanding clearly, since it's often assumed (incorrectly) that all Singapore grants restrict you to a fixed panel of local vendors.

Under EDG, what gets assessed is the project proposal — its scope, expected outcomes, and cost breakdown — not the vendor's location or prior grant registration status. A vendor that meets standard requirements (proper business registration, ability to deliver against the scoped work, transparent invoicing) can be engaged regardless of where the vendor is based, including offshore development partners, as long as the project itself qualifies and the application is properly documented. This is a separate but related question worth understanding in more depth, including what documentation typically strengthens an application — see our complete guide to funding custom software with EDG/PSG grants.

How should an SME decide between EDG and PSG for a software project?

Match the scheme to the project type first: PSG if you're adopting an existing, listed software product with minimal customization; EDG if the system needs to be built or substantially adapted around your specific business processes. Trying to force a custom build through PSG usually fails at the eligibility stage, since PSG's list simply doesn't include bespoke development. Conversely, using EDG for a straightforward off-the-shelf purchase adds process overhead that isn't necessary — the proposal and approval process for EDG is more involved than PSG's catalogue-based route.

A practical way to check: if you can name the exact software SKU you'd be buying and it appears on the PSG pre-approved list, that's your path. If you're describing a problem you need solved and no listed product solves it out of the box, you're likely looking at an EDG-funded custom project.

For the full picture on where custom software funding fits into Singapore's SME grant landscape — and how a project scope, budget, and vendor selection typically come together for an application — see our complete guide to funding custom software with EDG/PSG grants.

Where does grant funding leave off, and what should an SME budget for separately?

Grants typically cover a percentage of project cost, not the full amount, and rarely cover ongoing costs like maintenance, support, or future feature development after go-live. Even at the upper end of EDG's support level, an SME still needs to fund the remainder of the qualifying costs plus any expenses outside the qualifying scope — and post-launch maintenance is a recurring cost that grants generally don't touch at all.

For reference, typical unfunded costs SMEs should plan for after a grant-supported build:

• The co-funding portion (the percentage not covered by the grant)
• Annual maintenance, typically running 15–25% of the original build cost per year
• Any feature expansion or scope changes requested after the project's approved scope closes

Budgeting realistically for these components — rather than treating the grant percentage as the full cost of ownership — avoids a common gap where a business secures funding for the build but hasn't planned for what comes after. Companies weighing where to build the system, not just how to fund it, sometimes also compare delivery models; for context on outsourced development quality and cost structure, see Is Vietnam Good for Software Outsourcing? A Data-Driven Answer and Best Software Outsourcing Companies in Vietnam 2026.

FutureTech's approach

FutureTech works with Singapore SMEs on custom software and ERP projects where grant funding — EDG in particular — is part of the financing conversation from the scoping stage, not an afterthought. We provide transparent cost breakdowns by project tier — for example, a custom MVP build typically starts from S$22,000, with mid-range projects running S$40,000–190,000, so the qualifying-cost portion of a grant application is clear from the outset. We support the documentation typically needed for an EDG proposal. We don't advise on grant approval decisions — that's Enterprise Singapore's call — but we make sure the project scope and cost structure are presented clearly enough for your own consultant or in-house team to build a strong case.

Want to see how a custom software or ERP project could be scoped and costed for a grant application? Reach out to FutureTech for a business survey and quote. Pricing is indicative and confirmed only after we understand your actual operational requirements.

Pricing shown is indicative; final quotes are confirmed after a business requirements survey.

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FAQ

Can a startup with no revenue history still apply for EDG or PSG? Yes, but eligibility depends on meeting the scheme's registration, shareholding, and size criteria rather than revenue track record alone — very early-stage companies should confirm directly with Enterprise Singapore whether their specific stage qualifies, since some project categories expect a baseline of operating history.

Can EDG and PSG be used together on the same project? Generally no for the same cost items — each scheme funds distinct cost categories and project types, so a single project usually draws from one scheme, though a mixed project with both an off-the-shelf component and a custom-build component may in principle involve both, subject to confirmation with Enterprise Singapore.

Does the software vendor need to be based in Singapore to qualify for EDG? Not necessarily — EDG evaluates the project itself, not the vendor's location, so offshore development partners can be part of a qualifying project provided the proposal and documentation meet requirements.

How long does an EDG application typically take to get approved? Timelines vary by project complexity and current processing volumes at Enterprise Singapore; applicants should check current processing guidance on the official portal rather than assume a fixed turnaround, and should avoid starting project work before approval.

Is grant approval guaranteed if my business meets the eligibility criteria? No — meeting eligibility criteria makes a business eligible to apply, but approval and the actual support percentage are assessed case-by-case and are never guaranteed; all figures in this guide are subject to change and approval, and should be verified against current 2026 scheme conditions.