What is the PSG?
The PSG was launched in 2018 to consolidate several earlier SME productivity grants into a single, simpler scheme. The premise is that many SMEs know they should digitalise but find evaluating, procuring and budgeting for solutions intimidating. The PSG removes much of that friction by:
- Pre-approving the solutions you can spend the grant on, so you don't have to make the case for why a particular product is "productivity-enhancing".
- Pre-vetting the vendors authorised to deliver those solutions, so the grant doesn't subsidise low-quality work.
- Standardising the application process through the Business Grants Portal (BGP), so SMEs use the same form regardless of which government agency ultimately disburses.
In effect: "these are the things we want you to buy, these are the vendors who can sell them to you, we'll pay up to half."
Who runs it and what it funds
The PSG is administered by several government agencies depending on the type of solution:
- Enterprise Singapore (ESG) handles the overall programme and most sector-specific packages (food services, retail, logistics, construction, etc.).
- IMDA manages the digital / IT solutions track — the bulk of pre-approved CRM, accounting, HR, inventory, e-commerce, cybersecurity, and other software solutions.
- Sector lead agencies (e.g. Singapore Tourism Board for tourism, Land Transport Authority for transport) manage their own sector-specific solutions.
The grant covers two broad categories:
- Pre-approved IT solutions and packages. Software, SaaS subscriptions (typically capped at one year), customisation, and implementation services for a pre-approved solution. This is where most SI work is funded.
- Pre-approved equipment. Selected machinery, point-of-sale terminals, kitchen equipment, kiosks, robotics, and similar capex items that meet productivity criteria.
The current list of pre-approved solutions and equipment is published on the Business Grants Portal at businessgrants.gov.sg. The list updates regularly — new solutions are added, older ones are retired, and funding caps can change with the budget cycle.
SME eligibility
To qualify for the PSG, the applicant company generally needs to be:
- Registered and operating in Singapore. The applicant must be a registered business entity in Singapore (private limited, sole proprietorship, partnership, LLP).
- An SME by Singapore's definition. The standard test is at least 30% local shareholding, with group annual sales turnover not more than S$100 million OR group employment size not more than 200 employees.
- The end user of the solution. Purchase must be for use by the applicant company's business in Singapore — not for resale, not for an overseas subsidiary.
Some pre-approved solutions have additional sector-specific eligibility criteria (e.g. only food-service establishments can claim the food-service solutions). Check the specific solution page on the BGP for any extra conditions.
The grant uses CorpPass (Singapore's business identity service) to authenticate applicants. The person submitting on behalf of the company needs the right CorpPass role assigned by their business administrator.
Funding levels and caps
The headline support level for PSG has settled at up to 50% of qualifying costs from 1 April 2023 onwards, after a temporary boost to 70% during the COVID-19 period. There is also an annual cap per SME (currently in the region of S$30,000 of grant support across all PSG applications in a financial year, but this figure has been adjusted in past budgets, so check the BGP for the latest cap).
Key things to understand about the funding:
- Co-funding, not full funding. You always pay the larger share. PSG is not free software.
- SaaS subscriptions are typically capped at one year. The grant subsidises adoption, not ongoing operating cost.
- The cap is on grant disbursement, not project cost. A $100,000 project where the grant covers $30,000 is allowed; the remaining $70,000 comes from the applicant.
- Reimbursement, not upfront. You pay the vendor first, then claim the grant from IMDA / ESG after implementation is verified.
Pre-approved solutions vs equipment
The pre-approved IT solutions list on the BGP is organised by sector and by solution category. Common solution types include:
| Category | What gets funded | Typical buyer |
|---|---|---|
| Accounting & finance | Cloud accounting platforms, e-invoicing, expense management. | Almost every SME. |
| CRM | Customer relationship management implementations — Salesforce, HubSpot, Zoho, local CRM platforms — with first-year SaaS plus configuration. | Sales-led businesses, B2B services firms. |
| HR & payroll | HRMS platforms, e-leave, payroll software, time-and-attendance. | Businesses past ~10 employees. |
| Inventory & ERP | Inventory management, light ERP for retail / wholesale / distribution. | Trading, retail, F&B businesses. |
| E-commerce | Online store platforms, marketplace integrations, payment gateways. | Retail and B2C businesses going online. |
| Cybersecurity | Endpoint protection, email security, MDR, MFA, awareness training. | Any business with sensitive data — increasingly all of them. |
| Sector packages | Pre-bundled solution stacks for food services, retail, logistics, construction, etc. | SMEs in those sectors looking for an integrated approach. |
| Equipment | POS terminals, self-ordering kiosks, robotic process equipment, certain kitchen and warehouse machinery. | F&B, retail, logistics. |
If the solution you want isn't on the list, it doesn't qualify for PSG. (There are other grants — EDG, MRA — that can fund non-pre-approved solutions, but with a more involved application process. See our EDG guide for the next-tier option.)
How to apply
The end-to-end flow looks like this:
- Identify the business need. What process are you trying to digitise? What outcome do you want? This is the same scoping work as any technology procurement — see System Integration Explained for the basics.
- Find a pre-approved solution. Browse the BGP's pre-approved list, filter by category and sector, and shortlist solutions that match the need.
- Get vendor quotes. Approach the vendors offering the shortlisted solutions for a quote. Ask for itemised pricing (software, customisation, training, support) — the grant only applies to qualifying line items.
- Submit a PSG application via the BGP. Log in with CorpPass, select the chosen solution, attach the vendor quotation, fill in the business and project details, and submit. The grant agency reviews and either approves, rejects, or asks for clarification.
- Get approval before signing the contract or making payment. This is critical — costs incurred before grant approval are typically not reimbursable. Wait for the formal Letter of Offer.
- Sign with vendor and implement. Pay the vendor in full according to the project plan.
- Submit the claim. Once implementation is complete (or per agreed milestones), submit a claim with proof of payment, deliverables, and any required attestations.
- Receive disbursement. The grant amount is paid into the company bank account on file.
How to pick a pre-approved vendor
Pre-approval means the solution has been vetted. It does not mean every vendor selling it is equally good. A few things to look for:
- Track record with similar SMEs. Ask for references from companies of similar size and sector. A vendor used to enterprise rollouts may over-engineer an SME project, and vice versa.
- Honest scoping. A good vendor pushes back on scope: they'll cut features that don't earn their cost, and they'll flag dependencies you hadn't thought about (data migration, training, change management).
- Post-grant pricing. The grant covers year one of a SaaS subscription. What does year two look like? What is the renewal pricing, and is there a lock-in?
- Local support. When the system breaks at 4pm on a Friday, you want a phone number that gets answered. A vendor with a Singapore-based support team is worth more than one routing tickets to a 12-hour offset.
- Conflict of interest. Some vendors are pre-approved across many solutions; they'll have a preferred one. That's not necessarily wrong, but ask for the trade-offs.
Our directory tracks PSG-pre-approved IT vendors — see the PSG software-vendor list for a starting point.
Common pitfalls
- Spending before approval. The most common cause of grant rejection. Wait for the Letter of Offer before signing or paying.
- Mis-scoping the SaaS line item. The grant typically covers one year of subscription. Loading more years into the quotation will get the excess struck out at claim time.
- Missing the SME definition. If your group turnover is above S$100m or your group headcount is above 200, you don't qualify — even if your Singapore entity is much smaller. The test is at the group level.
- Not bundling related solutions. If you're rolling out CRM, accounting, and HR all in one quarter, treat them as one programme rather than three separate PSG applications. Per-SME annual caps apply across applications.
- Forgetting the claim window. Claims must be submitted within the time window specified in the Letter of Offer (typically tied to project completion). Late claims can be refused.
- Counting on PSG to fund a custom build. PSG funds pre-approved off-the-shelf solutions. If you need bespoke development, look at EDG instead.
Where to go next
- Next-tier funding: Enterprise Development Grant (EDG) — for larger or more bespoke transformation projects.
- Pre-approved vendors: PSG software vendors in Singapore in our directory.
- Skills funding: WSQ AI Certifications in Singapore — SkillsFuture funding for the people side.
- Scoping your project: System Integration Explained and Choosing a System Integrator.
Browse PSG-pre-approved vendors
Looking for a pre-approved IT vendor for your PSG application?