FAQ: Applying for the EMDG

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29th June, 2020

FAQ: EOFY and the Export Market Development Grant

Austrade is handing out more money than they have in years under its EMDG scheme this financial year. Here are the things you need to know before applications open on 1 July.

The Export Market Development Grant (‘EMDG’) is a government funding program that offers Australian businesses cash reimbursements on expenses incurred when exporting their local products, services, intellectual property or know-how.

Each year, between 1 July and 30 November, Austrade accepts applications via its online submission portal and offers applicants up to $150,000 in cash to retrospectively cover 50 percent of a wide range of marketing costs. These costs include online advertising, overseas marketing trips, engaging marketing consultants, attending trade shows, and several other categories.

Preparing EMDG applications can be quite an involved process and being aware of the rules and legislative requirements of the program is key to applying successfully. So, before you get started on preparing your submission for the 2020 financial year, here are the answers to some common questions that are asked about this particular grant program.

How does the submission process work?

Submissions are accepted by Austrade via its online application portal, which can be accessed using the government’s new myGovID and Relationship Authorisation Management system, which went live earlier this year.

The online portal opens a couple of weeks prior to 1 July, allowing applicants to begin prefilling their answers to be ready for prompt submission once the form actually goes live and starts accepting applications.

Submissions are made up of about 40 questions on the applicant business, following which the applicant is asked to list specific details about all of the different expenses that were incurred, and attach a series of documents in support of its claim.

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How and when does the grant get paid out?

Once submitted, a grant assessor reviews the application for errors and inconsistencies and decides whether they’re happy with the information provided or whether they’d like to see additional documentation in support of the claim.

Assuming the application is approved, an initial grant payout is made to the applicant right away. Normally, this initial payment is capped at $40,000, but due to the cash flow issues that COVID-19 has brought to Australian exporters, Austrade has raised the initial payment amount to $100,000 for 2020 applicants.

The residual grant amount is paid closer to the next EOFY and is normally prorated based on the amount of funds left in the EMDG kitty. Due to COVID-19 though, Austrade has generously guaranteed the full 50 percent entitlement for 2020 claims.

Is there anything I need to do before EOFY?

Since the EMDG works on a ‘cash’ basis (meaning, expenses need to have actually been paid and not just incurred), it’s important that all expenses that a company wishes to claim have left the company’s bank account prior to 30 June.

For business owners who incur company expenses on their own personal credit cards, if any of these expenses are to be claimed by the company under the EMDG program, the business owner needs to be reimbursed by the company before 30 June.

Do my overseas marketing efforts need to be successful in order to receive the grant?

In regular circumstances, a company does not need to show any export revenue generated from the countries they’re advertising to for the first two applications they submit.

From the third claim onwards, the gravy train ends, and the applicant needs to go through an ‘export performance test’ which caps the grant amount at a percentage of export revenue generated in each country where expenses have been incurred.

But, in consideration of the economic impact of COVID-19, Austrade is lifting the ‘export performance test’ requirement from all 2020 EMDG claims, a move that is making larger grant payouts more accessible to a much bigger range of applicants this year.

I’m an SME owner and this all seems like a lot to handle. What help is available?

There are many consultants that specialise in assisting companies with the entire EMDG process, from advising eligibility, preparing the application and expense schedules, and liaising directly with the Austrade assessor on the applicant’s behalf.

Given the complex nature of the EMDG, Austrade is more than happy to work together with expert consultants who prepare claims of behalf of other applicants.

Using a consultant will normally come at a cost though, so before engaging one, make sure to run a cost benefit analysis and weigh up how much of a grant you’re likely to receive against the cost of using the consultant.