21st October, 2019
These free government grants for small businesses and startups are your first port of call in getting off to a flying start.
Cash has always been one of the most valuable assets for startups. Applying for free government grants for small businesses can be great way of accessing sorely needed funding without having to give away equity.
At present, there are over 300 government grants and assistance opportunities available for Australian businesses, many of which can be extremely lucrative for small businesses operating in many different industry sectors.
This article was most recently updated in December 2020.
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Of all the different funding opportunities that the Australian government offers, there are some grants that are particularly lucrative for startups and small businesses. These opportunities exist on a federal, state and even city level and all are worth looking into.
Before outlining some of the more current and specific grants, let’s first look at the three overarching and industry-agnostic federal funding opportunities that can see an SME through some of its major early milestones.
The R&D Tax Incentive was designed to assist businesses that are conducting innovative and experimental activities in order to create novel products and processes in the science and technology space.
In 2011, changes to this incentive saw SMEs being allowed to claim a refundable tax offset for the costs associated with their eligible R&D activities. This meant that if the business is running at a loss-making position, they would receive their tax offset as a cash rebate.
The current value of the tax offset for SMEs conducting eligible R&D activities is 43.5 percent, which means if you’re running at a loss and have spent $100,000 on eligible activities, you could potentially receive $43,500 in cash.
The deadline for registering your eligible R&D is 10 months after the end of your income year and your eligibility is self-assessed. For further information on what you’ll need to register for the refund, visit the relevant Business.gov.au webpage.
Once you’ve finished up with most of your R&D activities, the next big step in the startup journey is figuring out how to successfully get your product to market. That’s where the AC Grant fits in nicely.
This competitive grant offers up to $1,000,000 in matched funding to assist with the commercialisation of new products or processes into new markets.
The good news about this grant is that you can apply for it at any time and, should you be successful, you’ll receive guidance and network support as part of the grant’s ‘portfolio services’.
The step before applying for an AC grant is submitting an application for the government’s ‘commercialisation guidance’ services. After submitting an application, the business is assigned a case manager who reviews the submission and offers feedback on the applicant’s commercialisation plan.
Part of the guidance will be whether the case manager recommends that the company goes through the main AC grant application.
Many SMEs tend to look at the Australian market as a ‘pilot program’ where they test and refine their product or service before they ‘go global’. Once you’re ready to expand beyond the shores of Australia, you’ll be ready to take advantage of the EMDG.
The EMDG is designed to see businesses through their overseas market exploration phase. It offers a 50 percent reimbursement (capped at $150,000 per application) for businesses who are spending money on activities that promote their product, good or service to the overseas market.
It’s important to note that, after it’s review of the EMDG scheme and the way in which it has been delivered over the years, Austrade (the agency administering the grant) recently announced the program will be going through some major changes — all of which are set to come into play for the 2022 financial year.
Most notably, funds will start being paid out uprfront, rather than in arrears, and grant amounts will be administered through a new, three-tiered system.
From the idea phase to the commercialisation phase, and following on to overseas expansion, the federal government can play a large part in funding your business along the way.
Don’t forget that many state and local governments offer small business grants as well. We’ve listed some of the more prominent ones from Victoria, NSW and Queensland below.
Here are a couple of great opportunities that Victorian startups and small businesses should keep an eye on.
1. LaunchVic Funding Rounds – Over the last couple of years, LaunchVic has been offering various rounds of funding opportunities that are designed to support the Victorian start-up ecosystem. Their current round (Round X) offers Victorian businesses with up to $250,000 to run initiatives that will help support Victoria based start-up founders. The guidelines to this one have been designed to be as vague as possible in order to attract ‘out of the box’ ideas from a diverse range of providers. (UPDATE: This funding opportunity is currently closed.)*
2. City of Melbourne Small Business Grants – Every year, the City of Melbourne runs a competitive grant program called the City of Melbourne Small Business Grant, which offers businesses located in the Melbourne CBD up to $30,000 to either launch, expand or export their business offering. (UPDATE: The program is currently under review, with new details expected to be published on the City of Melbourne website once available).
There are a couple of government grants that are specifically offered to NSW startup and scale-up businesses. These grants are administered by Jobs for NSW.
1. MVP Grant – This competitive grant offers up to $25,000 to very early stage start-ups who are yet to generate revenue to assist them in putting together a minimum viable product (MVP). Grant applications are available online and all year round, with assessment generally taking eight weeks after the date of application.
2. Building Partnerships Grant – Once an MVP has been developed and the business is generating revenue, this competitive grant offers up to $100,000 to assist them with customer acquisition projects. (UPDATE: Jobs for NSW have paused accepting new applications for this grant for this financial year. Keep an eye on the website or send an enquiry if you’d like to know when they next open).
While there are a several government funding opportunities that the Queensland government offer, one of the more popular ones has been the Ignite Ideas Fund – a competitive grant program administered by Advance Queensland.
This grant offers up to $200,000 and is designed to assist Queensland based SMEs who are ready to commercialise their innovative product or process. (UPDATE: All funding rounds for this initiative have since closed).
When it comes to industry specific grants, the government tend to offer grants and assistance to businesses working within their five ‘growth sectors’ which are: energy, mining, advanced manufacturing, health and agribusiness.
Here are a few examples of some of those industry specific grants:
This all just the tip of the iceberg. For all the current information on the Australian government grants/assistance landscape, head over to www.business.gov.au/assistance and www.grants.gov.au and you’ll find hundreds of opportunities that your business could benefit from.
*This article was first published in March 2019 and has been updated to reflect changes to various industry grants and funding opportunities.