Here’s a guide for how to navigate the small business and startup grants available from the Australian Government, including an overview of the more popular funding available. The early stages of running a business are arguably the most challenging to endure, mainly due to a lack of funding.
Some of the world’s greatest business ideas could simply never take off due to the founder’s inability to fund the project on their own.
Small business and startup grants to fund your growth
Whether it be hiring staff, engaging contractors, subscribing to useful software products, or paying to keep the lights on, meeting these expenses on a monthly basis can be extremely challenging when a business is yet to have established its service offering and begin generating steady income.
Here in Australia, the Federal and State Governments recognise this challenge, and offer many grants and incentives to enable those with promising business ideas to build commercially viable businesses.
Opportunities are opening and closing on a daily basis, and being aware of what is out there is crucial if the business is to capitalise on those opportunities.
To go a level deeper when looking for grants, there are various grant-finding tools that the state governments provide as well.
There’s the Victorian grants finder, the Queensland grants finder, there’s the NSW grants and funding webpage, the South Australian GrantASSIST tool, the Tasmanian grants and funding opportunities webpage, WA’s small business grants and tenders webpage, and the Nothern Territory grants directory.
Many local councils often run grant programs that may not appear in the federal or state grant directories, so visiting your LGA’s website and seeing if there are any opportunities currently available is another way to remain across the relevant opportunities.
For example, the City of Melbourne council has its own grants and sponsorships webpage, and the City of Sydney has one too.
Signing up to receive alerts and newsletters from your LGA’s website is a great way to stay across all of the local funding opportunities as they surface.
While each government incentive has its own set of rules, guidelines, criteria and application process, there is a general approach that can be used in most circumstances.
1. Review grant guidelines
Review any opportunity’s guidelines as provided by whoever administers it.
By being aware of eligibility and assessment criteria, the grant objectives, rules around eligible expenses and reporting requirement, the business can make an informed decision as to whether this particular opportunity suits their needs.
2. Collect up-to-date financial statements
Most of the time, the application form will request details pertaining to the company’s finances (such as turnover, export sales, tax position, and so on), and will often require for the company to attached its Profit & Loss statement as well as its Balance Sheet.
3. Leave yourself plenty of time to prepare a thorough application
Grants can be very time consuming and quite resource heavy, so the business needs to make sure that it has enough time, money and people to see the application process through to the end.
4. Triple-check final documents prior to submission
A common reason for failing to secure government funding is the inability to finalise the application — so do whatever you can to avoid going down that path.
Below is a curated list of some grants and incentives that have consistently offered substantial funding to businesses operating in a wide variety of industry sectors.
Promoting the development of scientific and technological products, services and processes
As one of Australia’s long standing government funding mechanisms, the Research & Development Tax Incentive (RDTI) continues to provide financial support to businesses developing innovative products or processes across various verticals in science and technology.
The support offered through the RDTI regime takes the form of a tax offset that can be applied against eligible costs (such as wages, contractors, subscriptions, depreciation of equipment, and others) that have been incurred while conducting eligible R&D activities.
For an activity to be considered eligible for the RDTI, it needs to meet a series of criteria which are set out in Section 355 of the Income Tax Assessment Act 1997.
Assuming a business meets the eligibility criteria, it’s entitlement to the incentive is automatic (in other words, the RDTI is in no way competitive).
The value of the RDTI changes based on an applicant’s ‘aggregated turnover’, which refers to amount of revenue generated during a financial year by the applicant company itself as well as any of its connected or associated entities.
Applying for the incentive involves the preparation of two submissions to separate government agencies.
- A submission to a government agency called AusIndustry outlining how the activities conducted meet the eligibility criteria; and
- Assuming AusIndustry accepts this application, a subsequent form detailing the expenses incurred needs to be prepared and submitted to the Australian Taxation Office (ATO) together with the company’s income tax return
While the RDTI is an incentive that can be applied for autonomously, due to its complex eligibility criteria and the fact that is largely administered by the ATO, many businesses opt to utilise the services of an advisor that specialises in this area of tax law to prepare the application.
For the commercialisation of innovative products and services
The Accelerating Commercialisation (AC) grant is another major government grant scheme that targets businesses working in the science and technology space.
Matched funding of up to $1 million is available to businesses who are looking to commercialise a novel product or process under this incentive.
To be eligible to apply, a business must be able to demonstrate a need for funding, and cannot have sold their novel product or process at its full commercial value.
Applications are competitive in nature and are assessed against a series of merit criteria, including market opportunity, ability to deliver the project, impact of grant funding, and several others.
Before applying for the grant, businesses are first required to submit an application for ‘Commercialisation Guidance’, which is a form that asks the applicant to provide details about their proposed commercialisation project.
This application is then assessed by a government representative, and assuming the representative believes that the proposed project is compelling enough, the business is then invited to apply for the AC grant.
If a business is successful in receiving this grant, payments are made upfront on a quarterly basis, as long as the grant reporting requirements are met.
The AC grant is part of AusIndustry’s broader Entrepreneurs’ Programme, which offers a range of financial and advisory services for innovative businesses looking for government support during the earlier stages of their venture.
To support the export of Australian goods and services to overseas markets
Administered by Austrade, the Export Market Development Grant (EMDG) is a grant scheme that offers support to businesses who are looking to take their Australian goods or services to overseas markets.
Much like the R&D Tax Incentive, the EMDG has its own set of legislation that governs its rules (the Export Market Development Grants Act 1997), and is an entitlement to those who are eligible for it.
The EMDG offers a 50 percent reimbursement on costs including the engagement of overseas representatives, marketing consultants, sending free samples, online advertising, trademark and patent registration, and several others.
In early 2021, the EMDG went through a major overhaul, and the way in which the grant is now administered has changed quite significantly.
The updated guidelines now involve the submission of an ‘eligibility assessment’ application early in the financial year. Austrade then review this application and, assuming they deem the entity to be eligible, they offer the applicant a grant agreement, which places them in one of the following three tiers:
- Ready to export – offering up to $80,000 in reimbursements over a 24-month period to entities that are making their first export move into the overseas market.
- Expanding – offering up to $240,000 in reimbursements over a 36-month period to entities that are expanding their existing export activities.
- Expanding and making a strategic shift – offering up to $350,000 in reimbursements over a 36-month period to entities that further expanding their export activities and targeting new markets or new types of customers.
Once the entity accepts the agreement, payments are made on a quarterly basis and are matched to the amounts spent by the entity – up until the cap for that particular tier.
Irrespective of which tier a business falls under, the maximum amount of funds that can be received throughout the lifetime of a business is $770,000, and grants paid out under the old regime count toward this amount.
Grants for expenses incurred up until 30 June 2021 still fall under the old regime, which requires the submission of the entire year’s worth of export expenses. Applications will remain open to the public up until 30 November 2021, after which the old program will be officially retired.
- Overview of the new program
- Details for expenses incurred up until 30 June 2021
- Overview of the new application process
Aimed at bolstering female entrepreneurship across Australia
Once a year, the Australian opens up a round of grant funding aimed at supporting female led businesses with their expansion into local or international markets.
The Boosting Female Founders Initiative (BFFI) is a competitive grant that offers up to $480,000 in matched funding to businesses that are majority owned and led by females.
To apply, eligible founders are required to submit an ‘Expression of Interest’ (EOI) which outlines the nature of their project and how they meet the eligibility criteria.
Being a competitive grant, there are also a series of merit criteria that each application is judged on, including the impact of the grant, the business’s ability to deliver the proposed project, and how the grant will enable the business to scale its operations.
Assuming the business passes the EOI phase, it then receives an invitation to enter the second phase: the main application, which is an elaborate application process that requires a significant amount of detail about the proposed project, including budgets, project plans, milestones, and a series of key supporting information.
For the development of scientific and technological products, processes and services
The CSIRO offers vouchers of between $10,000 and $50,000 to help small businesses undertake research and development projects.
The vouchers can be used to access CSIRO resources to conduct research into a new idea or discovery with commercial potential, development of a novel product or process, or testing the already developed novel product or process.
Applicants are required to match the funding sought from the CSIRO on a dollar-for-dollar basis, and the proposed project can last for up to one year.
To apply, the applicant business is first required to submit an EOI outlining the scope and details of the proposed project. Assuming the EOI is accepted, a full application is then required to be completed in conjunction with a representative of the CSIRO.
Applications can be made all year round, and are subject to available resources.
Supporting employment and a diverse workforce
To encourage businesses to take on a range of staff from diverse demographics, the Department of Education, Skills and Employment offers wage subsidies for hiring eligible job seekers.
Eligible job seekers include:
- People between 15-29 years of age
- Indigenous Australians
- People over 50 years of age
- People registered with an employment services provider for more than 12 months
Subsidies of up to $10,000 are available, and are administered by employment services providers.
To receive the subsidy, the business must engage an employment service provider and work with them to determine their eligibility and the specific details of how it will be administered.
State-based grants worth considering
Supporting NSW-based early stage tech businesses
For New South Wales based businesses that are at the early stages of creating new products and services, the Minimum Viable Product (MVP) grant offers up to $25,000 in matched funding to support eligible and compelling ventures.
To be eligible for this grant, the business needs meet a series of criteria, including having completed its proof of concept, not having generated revenue yet, demonstrate that it will conduct at least 80 percent of the development in NSW, and others.
The MVP grant is competitive in nature as well, so in addition to the eligibility criteria, the business’s application will be judged against a series of merit criteria as well, including the economic benefits the proposed project will bring to NSW, its level of innovation, strength of business model and benefits to specific industry sectors.
Applications are generally accepted all year round, and the average turnaround time is 12 weeks.
Ignite Ideas Fund – Queensland
Supporting Queensland-based tech businesses
Queensland-based businesses that are ready to commercialise an innovative product or service that they have already developed are able to tap into the Ignite Ideas Fund, a competitive grant that offers up to $200,000 in funding to take these products to market.
Much like the AC grant and the BFFI, businesses that apply for the Ignite Ideas Fund are first required to submit and EOI that outlines their proposed project and general business details.
Funding under this scheme is offered in two tiers:
- Tier one: Up to $100,000 in funding that the applicant business can match at least 20 percent
- Tier two: Up to $200,000 in matched funding
Rounds of the Ignite Ideas Fund are generally made available annually, and the process typically spreads across the second and third quarter of the relevant calendar year.
The key assessment criteria for this grant (in addition to the eligibility criteria) include benefits to key industries in Queensland, benefit to regional Queensland, job creation, and several others.