Primary Objective
EDG and PSG have very different assistance objectives. EDG is broad-based, the whole of organization assistance primarily to build new capabilities, i.e., your enterprise would provide a new value proposition to your customers as the outcome. Many applicants have got the wrong impression that implementing business software qualifies as a new capability. The business software is merely changing the operational method, but the capability of the enterprise often remains. To be eligible for software and hardware support, the key operative for the new value proposition must be addressed. In short, putting old wine in a new bottle mentality will not cut it.
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PSG, on the other hand, is narrow focus assistance intended to fill a gap. It was initially for micro-SMEs but later expanded to larger SMEs. For example, if your enterprise has trouble managing inventory, you could apply for an inventory management system under the PSG. Notice that the assistance is only in one specific area. Integration of the system to other areas, e.g., accounting is considered out of scope and will not be supported. So, you have to think carefully when adopting PSG solutions because you may end up with piecemeal disparate systems. This situation is not a problem for micro-SMEs but certainly for larger SMEs, where integration is critical for smooth operations.
Eligibility
For EDG and PSG applicants, the following criteria apply:
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A business entity that is registered/incorporated in Singapore
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At least 30% of local shareholding.
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If your enterprise is a subsidiary of a larger corporation, the Group Annual Sales Turnover must be less than S$100 million, or Group Employment Size of not more than 200 workers.
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Purchase/lease/subscription of the Equipment or IT Solution must be used in Singapore.
Did you know that subsidiaries of public listed corporations or multinationals are eligible so long the above criteria are met? The applicant is expected to provide company registration details in the Accounting and Corporate Regulatory Authority (ACRA) business profile printout and financial statements.​
About Grants
In Singapore, 99% of businesses are Small, Medium Enterprises (SME), employing 70% of the labor force. Also, Singapore being an open economy, SMEs are susceptible to external trade competition. Hence, there are social and economic implications if the SMEs cannot rise to competition. This is where government grants come in. The primary focus of grants is to assist SMEs in building up a competitive edge and new capabilities. Enterprise Singapore (ESG), a statutory board under the Ministry of Trade and Industry, is the lead administrator of grants. There is a mind-boggling array of grants out there, and it can be very confusing to SMEs. This section provides insight into the most common grant, the Enterprise Development Grant (EDG) and the Productivity Solutions Grant (PSG).
Support- Pt. 1
For EDG, the standard grant support is up to 50% of the qualifying project cost. For sustainability-related projects, the support level will be up to 70% from 1 April 2023 to 31 March 2026. The qualifying costs covered are:
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Consultancy.
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Testing and Certification.
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Machinery, Hardware & Software
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Training for technology adoption or project implementation.
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Staff salary for those involved in the project, excluding Directors.
The grant quantum varies for every applicant. ESG will assess applicants individually. Some may get the full support, and others may be lower percentages. Past experiences indicate that applicants with higher-value add outcomes or promising sectors will enjoy better support. Unsupportable costs are set-up costs, operational costs, and costs associated with regulatory licenses.
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PSG is straightforward. The standard grant level is 50% capped at SG$30K per financial year, whichever is lower. From 1 April 2023, the PSG Energy Efficiency Grant will support up to 70% capped at SG$30K per financial year, whichever is lower. The support is for pre-scoped solutions from a list of pre-approved service providers maintained by various government agencies such as the National Environmental Agency (NEA), Infocomm Media Authority (IMDA), Workforce Singapore (WSG), and Singapore Tourism Board (STB).
Support- Pt. 2
We have come across applicants who aren't too happy to pay the remaining costs. All government funding is given based on shared risk. If the applicant does not put their money into the game, there is certainly no risk and no interest on their part in completing the project. To further lessen the cash outlay, now you could use your Skills Future Enterprise Credit (SFEC) to offset some of the out-of-pocket expenses. Here is an illustration of how SFEC lowers your cash payment for a project under EDG or PSG valued at SG$50K for an environmental impact energy reduction scope project:
The SFEC is announced every new budget year with different qualifying periods. Look out for it on every budget announcement in February. To qualify for SFEC support, your enterprise must meet the eligibility criteria:
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Contributed at least SG$750 Skills Development Levy over the period.
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Have employed at least three Singapore Citizens (SCs) or Permanent Residents (PRs) every month over the same period.
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Have not been qualified in any of the earlier periods.
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Have not used up your SFEC credit balance of SG$7K for Enterprise Transformation and SG$3K for Workforce Transformation.
Service Providers
For EDG, the project consultant must be certified under the Consultant Quality Initiative (CQI) scheme. For hardware, software, and training providers, you are free to choose the appropriate service provider that meets your project requirements.
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For PSG, unfortunately, you are restricted to a list of pre-approved service providers. You may have a specific service provider in mind that could offer better value, but if your preferred provider is not listed; you will not be able to apply for PSG with this provider.
To Apply
There is a misconception that EDG and PSG applications can only be made through SME centers, Trade Associations, Institutes of Higher Learning, or Productivity Centers. The fact is, you can make the application yourself via the business grant portal. Here are a few things to prepare before submitting your application:
Notes:
#1: A 3-year audited financial statement is required. If you have been operating for less than three years, audited financial statements will suffice for the last two years in operation. If you have less than one year of operation, you need to supply Projected Income Statement, and to date, unaudited financial statements or management accounts.
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#2: ESG takes a severe view of backdating a project for claiming grants. For this reason, you shall not start the project or enter into an agreement with the vendor or service provider. You can do so after you receive the Letter of Offer from ESG.
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#3: The project proposal is not to be confused with the Project Consultant's proposal. It is a business case write-up to justify your project scope and outcomes. We provide this service for free when you engage us in grant supportable consultancy services listed on this site. We will also advise you on the projected 3-year impact outcomes from the project.
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#4: Staff salaries (excluding Directors) involved in the project are supported. You need to provide objective information to ESG for calculating the supported amount.
Acceptance
For EDG, there will be a waiting period of at least 4-8 weeks for ESG to evaluate your project. For PSG, it is less than 4 weeks. During this time, ESG may contact you for clarification or to submit additional documents. On approval of your project, you will receive a Letter of Offer. You will need to accept or reject the offer in the business grants portal. If you accept the offer, take note of the project qualifying period. This is an important deadline. The project could become unsupportable if you missed the deadline without making amendments to the qualifying date.
Claims
All EDG or PSG claims are on a reimbursement basis. Hence it is necessary to prove you have completed the project and incurred the costs per your Letter of Offer. If you have not had a GIRO account set up with ESG, this is the time to do so. You will need the following documents to be submitted in the business grants portal:
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Project report
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Project invoices and bank statement
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Staff salary statements (for those involved in the project)
Once you submit the claim, you will need to appoint an auditor from a list of financial auditors in the portal. The auditor will verify the documents submitted against your actual project deliverables. Do note that the audit fee is part of the grant Letter of Offer. So make sure you choose one that is within the grant amount. You will receive a GIRO inward bank remittance from ESG to your business account in 6-8 weeks when everything is in order.​
Frequently Asked Questions
Yes. If your project does not involve equipment purchase, i.e., small value projects of less than SG$50K. You may have to show ESG that you made alternative financing to pay your service provider. As a reimbursement scheme, you need to pay first and be reimbursed later.
If your project requires equipment purchase, i.e., big value projects above SG$50K, ESG may require you to apply for financing through your bank or ESG financing schemes.
My business is not profitable or loss-making. Can I apply for grants?
A non-SME could be a multinational but have a local registered office in Singapore. As long as the local registered operations in Singapore meets the eligibility criteria, the grant is open to non-SME.
Are non-SME eligible to apply for grants?
Charities, Institutions of Public Characters (IPCs), Religious Entities, Voluntary Welfare Organisation (VWO), Government agencies, and subsidiaries are not considered SMEs. Hence not supported.
However, Charities, Institutions of Public Characters (IPCs), Voluntary Welfare Organisation (VWO) come under the purview of the National Council of Social Service (NCSS). There are funding programs for such organizations.
What type of business registered in Singapore cannot qualify for grants?
Eligibility FAQs
As long as you have credit balances in the Enterprise Transformation and Workforce Transformation, you can use each of them for out-of-pocket expenses in the qualifying period. After you have exhausted whichever balance, you will have to wait for the new qualifying period plus your business must continually meet the SFEC eligibility conditions.
How many times can I use my Skills Future Enterprise Credit (SFEC) to offset out-of-pocket expenses?
No.
You cannot sell the equipment after the project ended. You can only do so after the declared working life of the equipment from the claim disbursement date. Except for computer hardware, which is 1 year, all other automation equipment usually have a 3-5 year working life.
Can I sell the equipment after the project?
In our opinion, likely not supported unless there is some concrete factual justification to ESG. Equipment support is based on working life. With a leasing arrangement, the working life can be terminated prematurely.
I prefer to lease the equipment instead. Is this equipment supported?
Yes. From experience, the PSG only supports the first year of subscription. For EDG, the support is on a case-to-case basis.
My provider uses a subscription service model. Is it still eligible for support?
Yes, you can. You will need the overseas provider to quote you the actual equipment or service cost, converted to Singapore Dollars (excluding taxes, freight, insurance, duties, etc.). Remember, the cost will be verified against your invoices and payments during the claim process.
Can I purchase equipment or services from overseas?
For Enterprise Singapore (ESG) to support your grant, the proposed IT hardware and software must be able to distinctly build up a new capability. If the hardware and software do not meet this requirement but merely fulfill normal operational needs, then it will not be supported under EDG but may qualify for PSG instead.
My EDG grant does not support IT hardware and software. Why is that so?
The EDG supported equipment are those identified in the project proposal for capability development. These may include the equipment accessory such as the user interface panels. Peripheral equipment, power points, piping, network points, and office equipment are not supported.
PSG-supported equipment must provide the equipment within the approved scope.
I require equipment for my improvement project. What equipment is supportable?
Support Level FAQs
In short, Not OK and illegal. ESG classifies these sorts of deals as kickbacks. You and the service provider can be criminally prosecuted.
A service provider sweetens the deal by passing some savings back to my company if I choose their services. Is this OK?
We know of cases where the client wishes to have the consultant project manage the vendors. Putting all the vendor quotes into a single consultant’s cost proposal may seem sensible from a project management perspective. However, the EDG evaluation team needs a transparent cost breakdown of every single item from each vendor and their respective deliverables to determine the qualifying cost for each item. It is also to ensure there are no unnecessary hidden markups between consultant and vendor. In brief, the consultant can still manage the project per scope of work, but separate quotes are needed.
For PSG, this is not applicable.
Can I put every vendor quotation under one consultancy proposal for my appointed Project Consultant to manage?
If your new vendor is within the same scope and your application is still in process, you may request for a change and resubmit with the new vendor quote. On the same note, if you wish to change vendor of the same scope after receiving the Letter of Offer, you will need to withdraw your previous application and resubmit a new application with the new vendor quote.
If your vendor is of different scope, you will need to withdraw your previous application and resubmit a new application with the new vendor quote.
Can I change my equipment vendor in PSG?
Yes, you can. You must reject the offer, discharge your original provider in writing and resubmit as a new application. A new application is required because the entire original project proposal grant application was based on the original provider. Bear in mind that contractually, you may incur costs from service providers for terminating the project.
Going ahead without resubmitting will render your grant unsupportable, i.e., you will bear the full project cost. The reason is that the claim verification auditor cannot reconcile the original consultancy quote and deliverables against the new consultancy service provider’s invoices and receipts at claim time.
Can I change my consultancy provider after I receive the Letter of Offer?
Yes, you can. You must go into the business grants portal to withdraw your application and resubmit the application with the new consultancy quote.
Can I change my consultancy service provider after the EDG application?
Service Provider FAQs
As grants come from taxpayers, careful evaluation, verification checks, and balances ensure public monies are used responsibly. On the bright side, all these requests point to the fact that your application is being considered.
Why does ESG require so many supporting documents?
For EDG, if you consider the outcome or the amount of the grant as unimportant, you can start the project on the day of your application. However, we advise that you wait for the Letter of Offer instead. There may be conditions attached to your offer that you may want to seek an opinion.
For PSG, you can only start when you have received the Letter of Offer.
When is the earliest time I can start the project?
No. you cannot. It is considered backdating and illegal. Grants are offered for new projects only after the evaluation of outcomes and costs. Backdated projects leave many doubtful areas on deliverables, outcomes, and costs.
To save time, can I start the project first before applying for the grant?
For EDG, there is no limit. You can have several EDG applications for one project of different work scopes. But we must caution you on this. Doing several EDG projects at one go can tax your resources.
For PSG, the application must be consecutive, i.e., you must complete one at the claim stage before applying another.
You cannot apply for the same scope again for both EDG and PSG.
Is there a limit to the number of grant applications?
Grant Application FAQs
You need to go into the business grants portal to make an amendment request for an extension.
What happens if I cannot complete the project within the qualifying period in the Letter of Offer?
No, please do not ignore the conditions. On acceptance of Letter of Offer, you are contractually bound by the terms and conditions. Doing so renders your grant unsupportable, i.e., you will have to bear the entire project cost.
I don’t like some of the conditions attached to the grant. Can I ignore them?
Yes, you can. You must reject the Letter of Offer first. Also, contractually, you may incur costs from service providers for terminating the project.
If I am not satisfied with the grant amount, can I stop the project?
You must go into the business grants portal to do this.
How do I accept or reject the offer?
Yes, you can write to ESG.
If I am not satisfied with the grant amount, can I appeal?
Yes, you can write to ESG.
Can I appeal if my application is rejected?
Grant Acceptance FAQs
All claims are subject to verification of bank statement, invoices, and receipts. If you can find a service provider that do not require you to pay first, then you would have exposed yourself to an unlawful transaction. You and the service provider can be criminally prosecuted. In short, there is no other way around this.
Is there any way I do not need to pay first and to be reimbursed later?
For EDG, you can make a claim halfway through the project. To do this you need to discuss with your appointed officer from ESG during grant application. If you have forgotten to do so, you can still request an early claim halfway through the project. However, do bear in mind the claim process is the same as a one-time claim project, except that you will be doing it twice over. You must pay the claim verification audit fee out of your own expense and the project report will need to be written twice (with additional cost).
For PSG, this is not applicable.
I need to maintain cash flow. Can I claim for some of the purchased equipment halfway through the project?
If your final project cost is lower than the values in the Letter of Offer, ESG will only reimburse the lower value. The reimbursement principle is always whichever lower.
My actual project cost is lower than the grant amount. Will ESG pass down the unused grant amount to my company?
Additional costs may originate from variation orders or options exercised by your company. Optional items are usually not included in the Letter of Offer. The grant will only reimburse up to the value and qualified deliverables stated in the Letter of Offer.
My actual project cost exceeds the grant amount. Who will be liable for it?
Yes. It must be signed off by the named Director in the Letter of Offer to enable the claim to proceed.
Do I need to sign off the project report?
The project report is a write-up of the project completion and validation outcomes. Our project consultant takes care of this.
What is a project report?
The business grants portal only accepts softcopy documents in pdf format.