Who doesn’t like a bit of free money?
Entrepreneurs rightly stress over cashflow and finances. But they often overlook a ready source of funds – government grants.
Part of the problem is that many businesses don’t know these grants exist; let alone how to apply for them. But they can be lucrative sources of capital.
Plenty of businesses have been built on the back of grants and a significant amount of product put on shelves due to a little bit of assistance.
Many businesses find they’re eligible right away without having to do too much.
However, there has been a bit of a shake-up of grants in the past year, especially for the Clean Technology schemes now the carbon tax is being done away with a year early.
So we’ve put together an updated list of some of the best federal grants to help you on your way. Next week, we’ll look at the best state-based grants. We can’t list all of them – there are simply too many – but it’s a start.
After all – free money is just too good to ignore.
Export Market Development Grant
Designed specifically for SMEs, the Export Market Development Grant assists businesses that are planning to export – or already exporting – their products.
There are some guidelines, such as needing to have spent $20,000 over the previous two years on export expenditure.
But the benefit is immense – they reimburse 50% of eligible export promotion above $10,000, provided those expenses are at least $20,000.
Applications close in December – more details are available here.
Commercialisation Australia has one goal – to assist businesses in developing technology and other products to make them commercially viable.
These are substantial grants, too, and they’re in several tranches. Funding can range from $50,000 to $2 million. The money assists in developing skills and knowledge within the business, along with proof of concept and other steps along the way to commercialisation.
More information is available on the site here. (Although applicants should note the government is currently in caretaker mode before the election and isn’t taking new grants until after a government is accepted.)
Research & Development tax incentive
The R&D tax incentive is a powerful grant – it can mean a world of difference for businesses researching risky ideas.
The great thing is the benefit is open to businesses of all sizes: Those making under $20 million can access a 45% refundable tax offset, and bigger businesses earn non-refundable offsets of 40%.
The ATO is responsible for delivering the benefit, and there is a lot of paperwork involved. You need to satisfy plenty of eligibility tests, but the benefit is substantial.
Accelerated Australian Apprenticeships Initiative
The apprenticeships initiative is designed to support a completion of any vocational training program, with the funding directed to Industry Skills Councils and peak industry bodies partnering with employers.
The funding is discretionary and provided to projects that give attractive pathways for apprenticeships. Employers also need to put up between one to two thirds of the cost.
Applications are open at any time, and more information can be found here.
Automotive Transformation Scheme
Given the turmoil in the automotive sector, there would be plenty of businesses hoping for a helping hand.
The Transformation Scheme is designed to help businesses not only primarily responsible for making cars, but companies associated with the manufacturing process – like component makers.
The scheme is designed to run until 2020, and $1.5 billion of uncapped assistance is available until 2015. After 2016, capped assistance of $1 billion is available. More information including eligibility guidelines is available here.
Clothing and Household Textile Building Innovative Capability Scheme
These grants are available for businesses in the manufacturing and design industries. The grants are awarded on the ability to show they carry on or propose to carry on activity in the clothing and household textiles markets.
The money is substantial – providing 50% of expenditure with a minimum threshold of $200,000, although benefits are limited to 5% of revenue in the 12 months before the year the grant is claimed.
While applications have closed this year, applications for 2014-15 are due by July 2014. More information is available here.
Venture Capital Limited Partnerships (VCLP)
Any fund managers would be interested in this program, which is designed to provide money for investing in Australian businesses – particularly high-risk start-ups.
Funds need to register as a Venture Capital Limited Partnership, through which they can access flow-through taxation treatment.
There are some requirements, such as holding investments for a minimum of 12 months, and they need to be “at risk”. Target projects can’t have more than $250 million in assets, either, and at least half the project and employees need to be located in Australia.
More information about the program is available here.
Certain Inputs to Manufacture
Manufacturing is under pressure, but unfortunately, too few companies in the sector know about the assistance available to them.
The Certain Inputs to Manufacture scheme attempts to provide import duty concessions on raw materials and intermediate goods.
Applications are based on a technical assessment which proves the goods are superior to goods produced in Australia. But for struggling companies it can be a lifesaver.
More information about the grants is available here.
Clean Technology grants
As part of the government’s move to a carbon tax, it instituted two different investment schemes: The Clean Technology Investment program, and the Clean Technology Innovation scheme.
But with the recent announcement the government would bring forward the start of an emissions trading scheme, the funding information for both of these initiatives has changed.
Under those changes, funding already committed won’t be affected. But this also means the Clean Technology Investment Programs will be extended by one year to 2018-19 – which is good news for hopeful businesses.
After all, 488 grants have been approved by the Investment Program, and 25 under the Innovation Program. There’s still a lot of money available:
Clean Technology Innovation
Grants of between $50,000 and $5 million are available – on a co-investment basis – for programs that support research and development, proof of concept and early stage commercialisation activities that lead to new, clean technology and services.
More information is available here.
Clean Technology Investment
The Investment Program is a merit-based grants program to support manufacturers, and provides grants for investment in energy-efficient equipment and emission technology. More information is available on the government’s site, available here.
Next Tuesday, SmartCompany will bring you the best state grants on offer for small business.