Stack the grants: PSG + SFEC + EIS for SME AI in 2026

No official page assembles this stack, so we did. As of 11 July 2026, a Singapore SME buying AI tools has four layers of support that can apply to the same adoption push:

1. PSG — up to 50% of a pre-approved solution's eligible cost, capped at S$30,000 of grant a year. Apply before you pay anything.
2. SFEC — a one-off S$10,000 employer credit covering up to 90% of your remaining out-of-pocket cost. Final claims close 30 November 2026, 142 days from publication (11 Jul 2026).
3. EIS — a 400% tax deduction on qualifying AI expenditure, capped at S$50,000 per Year of Assessment, for YA2027 and YA2028.
4. EDG — the route for custom projects the PSG catalogue can't cover. Up to 50% support, no pre-approved vendor list, assessed project by project.

Stacked in that order, an S$8,000 AI subscription can land at about S$400 in cash. Stacked wrongly — pay the vendor a day too early, let the invoice drift from the application — and whole layers vanish.

Terms change, and the new EDGE grant will reshape them in 2H2026. Every figure here was checked against the official pages (linked in Sources below) on 11 July 2026 — confirm there before you commit money.

The worked example: an S$8,000 AI tool

Suppose you're buying one year of a pre-approved AI solution — an AI customer-service tool, say, picked from a shortlist like our PSG AI tools guide — quoted at S$8,000, all of it eligible cost.

Illustrative — confirm your numbers with your accountant and the official pages. It assumes you meet PSG's SME criteria, hold an untouched SFEC credit, and are supported at the full 50%.

Step 1: PSG pays half. Apply on the Business Grants Portal first. After approval, pay the vendor in full, then submit your one claim per application.

• Grant: S$8,000 × 50% = S$4,000, paid to your PayNow Corporate account in around 14 working days.
• Out of pocket: S$8,000 − S$4,000 = S$4,000 (well within the S$30,000 annual cap).

Step 2: SFEC covers up to 90% of the remainder.

• Credit drawn: S$4,000 × 90% = S$3,600. That fits inside SFEC's S$7,000 sub-cap for enterprise-transformation schemes, leaving S$6,400 of the S$10,000 credit for other claims.
• Cash cost now: S$4,000 − S$3,600 = S$400.

Step 3: EIS deduction on qualifying spend (YA2027–28).

• Conservative base — the S$400 you actually parted with: S$400 × 400% = a S$1,600 deduction against chargeable income.
• If your accountant reads the qualifying base as your cost net of the PSG grant only (S$4,000): S$4,000 × 400% = S$16,000.
• The official pages we checked don't spell out how the PSG grant and the SFEC credit net off against EIS qualifying expenditure — that is the exact question to put to your accountant. Both figures sit far below the S$50,000 per-YA cap. And a deduction is not cash: its value depends on your tax rate and on actually having taxable profits.

Where you land: S$400 cash for an S$8,000 tool — about 5% of sticker — plus a deduction worth between S$1,600 and S$16,000 against taxable income. Run your own numbers with your actual quote and credit balance.

Layer 1: PSG — the half-price engine

The Productivity Solutions Grant funds pre-approved IT solutions and equipment at up to 50% of eligible costs, with a S$30,000 grant cap per company per year (the cap year runs 1 April to 31 March). You qualify if the business is registered and operating in Singapore with at least 30% local shareholding, group annual sales of S$100 million or less or group employment of 200 or fewer, and the solution is used in Singapore.

Two recent shifts matter. Budget 2026 expanded PSG "to support more digital and AI-enabled solutions", so the AI slice of the catalogue is growing. And the catalogue itself lives on GoBusiness (Gov Assist) — if your tool isn't listed there, PSG cannot fund it, full stop.

Layer 2: SFEC — S$10,000 that expires 30 Nov 2026

The SkillsFuture Enterprise Credit is a one-off S$10,000 credit for eligible employers, covering up to 90% of out-of-pocket expenses on supportable schemes — PSG and EDG among them. Within the credit, use on enterprise-transformation schemes is capped at S$7,000; the credit also supports workforce-transformation spend such as courses.

There is no application: eligible employers have already been notified. Two implications. First, check your eligibility and remaining balance before you build the stack around it. Second, the official page is blunt — "SFEC support will expire on 30 Nov 2026" — and that is a claims deadline, so the whole PSG chain (apply, get approved, deploy, pay, claim) must finish before then. Starting a PSG application in October and expecting SFEC money on top is optimistic.

Layer 3: EIS — the 400% deduction

Budget 2026 expanded the Enterprise Innovation Scheme "to include AI expenditures as a qualifying activity, for the Years of Assessment 2027 and 2028, capped at $50,000 per Year of Assessment" — at the scheme's 400% deduction rate. In plain terms: qualifying AI spend reduces chargeable income at four times its value, on up to S$50,000 of spend per YA.

Two cautions. Your financial year end decides which YA a purchase lands in — ask your accountant where this quarter's spending falls. And as the worked example shows, how grants and credits net off against the qualifying base isn't spelled out on the pages we checked; get that confirmed before you count the tax saving in your budget.

Layer 4: EDG — for work the catalogue can't do

If what you need is custom — an AI workflow wired into your own systems rather than an off-the-shelf subscription — PSG is the wrong queue. The Enterprise Development Grant supports up to 50% of eligible costs (up to 70% for sustainability-related projects) for projects including automation. The official page states: "There are no pre-approved vendors for the EDG." Each application is assessed on project scope, outcomes and provider competency, which means a proper project plan and real paperwork.

Note the clock on all of the above: EDGE launches in 2H2026, streamlining MRA, PSG and EDG into one scheme. The official position is that existing grants remain accessible until launch. We log what's confirmed (and what isn't) in our EDGE grant tracker.

The traps that kill claims

Paying too early. The PSG rule is hard: payment made before the application is submitted disqualifies it, and retrospective applications are not supported. Practitioner guidance goes further — a June 2026 corporate-services guide puts it plainly: "Businesses must wait for official approval before making payment." Sensible, because if the application is rejected after you've paid, you own the full price.

Invoices that don't match. You get one claim per approved application. That same guide lists the recurring failure causes it sees: paying before approval, vendors not on the pre-approved list, incomplete documentation, and company records that don't match ACRA. Make the vendor bill exactly what the application says — same entity, same package, same price — and have PayNow Corporate set up before you claim.

Treating the SFEC deadline as an application deadline. It's a claims deadline: 30 November 2026. Work your timeline backwards from there, with approval and deployment time in the middle.

Buying because it's subsidised. A pre-approved solution at a padded price can cost more after 50% support than a fairly priced alternative with no grant. Check the vendor's non-grant market price first. And if the tool touches customer personal data, weigh the PDPA obligations alongside the discount, not after it.

Who shouldn't bother

• You don't meet the SME criteria — under 30% local shareholding, or above both the S$100 million revenue and 200-staff marks. PSG isn't for you; the EIS layer may still be, so ask your accountant.
• You've already paid or signed. The retrospective door is closed. Don't attempt creative paperwork; put the effort into the next purchase instead.
• Your tool isn't pre-approved and the spend is small. EDG-grade paperwork for a S$2,000-a-year subscription is a bad trade. Buy it unsubsidised, or consider a pre-approved alternative only if it genuinely fits your workflow.
• The grant value is smaller than the admin. Applications, quotes and claims cost hours of owner time. If the math says a few hundred dollars of support, your weekend may be worth more.
• No taxable profits. The EIS layer is worth little to you right now; the cash layers (PSG, SFEC) still work.

FAQ

Can I use SFEC on the same purchase I claimed PSG for?

Yes — that's its design. The credit covers up to 90% of out-of-pocket expenses on supportable schemes including PSG, within the S$7,000 enterprise-transformation sub-cap. Claims must be in by 30 November 2026.

Do I need to apply for SFEC?

No. The official page states eligible employers have been notified and there is no need to apply. Do check your eligibility and remaining balance before planning around the money.

Should I wait for EDGE instead of applying now?

Waiting costs you SFEC, which expires on 30 November 2026 with no replacement announced as of 11 July 2026. Existing grants (PSG, EDG, MRA) remain accessible until EDGE launches in 2H2026, per the official pages. Our EDGE tracker logs each official update as it lands.

My tool isn't on the pre-approved list — any support at all?

Not via PSG. If it's part of a substantial custom project, EDG may fit. Otherwise buy on merit at the market price — and see which AI tools are PSG pre-approved for grant-eligible alternatives worth comparing first.

What to do this week

1. Confirm you meet PSG's SME criteria (local shareholding, group size).
2. Check your SFEC eligibility and balance before counting the S$10,000.
3. Shortlist a pre-approved solution — start with our PSG AI tools guide and verify the listing on GoBusiness.
4. Get the vendor's quote and their non-grant price, and run both through our grant calculator.
5. Apply on the Business Grants Portal — and pay nothing until you have the approval.
6. Diarise the claim steps, ending well before the 30 November 2026 SFEC deadline.

These four layers are separate schemes run by separate agencies, and each can change without the others noticing. Bookmark our grants hub for the maintained picture, and rely on the official pages below for the letter of each scheme.

Sources

Grant terms checked against these pages on 11 July 2026. Terms change — if this article and an official page ever disagree, the official page wins; tell us and we'll fix it.

• Enterprise Singapore — Productivity Solutions Grant
• Enterprise Singapore — Productivity Solutions Grant FAQ
• Enterprise Singapore — SkillsFuture Enterprise Credit
• Singapore Budget 2026 — Budget Statement, section C
• Enterprise Singapore — Enterprise Development Grant
• Enterprise Singapore — Budget 2026 for businesses
• WLP Group — PSG grant guide for SMEs: common mistakes, 16 Jun 2026