Grants for startups and SMEs

By David Downie, Partner at Allworths Chartered Accountants

Whilst every business owner seeks to maximize revenue from customers, there is another source of business revenue that doesn’t rely on your customer sales skills – government grants.

There are numerous grants available to Australian businesses and it is worthwhile to consider whether your business may be eligible for one at either the Federal or State government level. Many of these grants are intended to help startup businesses and to encourage the development of new products and services.

Below I outline five of the potentially most useful grants for startups and SMEs to consider:

1.     Accelerating Commercialisation

The Accelerating Commercialisation grant is for SMEs, entrepreneurs, investors, startups, researchers and Commercialisation Offices who have a novel product, process or service that they want to commercialise.

The program provides:

• Expert advice and guidance
• Up to $250,000 of matched project funding for Commercialisation Offices and Eligible Partner Entities
• Up to $1 million of matched project funding for all other eligible applicants

To get Commercialisation Guidance you must:

• Have a novel product, process or service you want to commercialise
• Seek opportunities to trade in different states or territories to your place of business

To apply for an Accelerating Commercialisation Grant you must:

• Have received Commercialisation Guidance and then successfully apply for funding

Further information can be found here: https://www.business.gov.au/Grants-and-Programs/Accelerating-Commercialisation

2.     Export Market Development Grant (EMDG)

The EMDG scheme is an Australian Government financial assistance program for aspiring and current exporters that supports a wide range of industries.

The scheme provides:

• Encourages small- and medium-sized Australian businesses to develop export markets
• Reimburses up to 50 per cent of eligible export promotion expenses above $5,000 provided that the total expenses are at least $15,000
• Each applicant may receive a grant of up to $150,000 per application (subject to available funds), to a maximum of eight annual grants

Further information can be found here: https://www.austrade.gov.au/Australian/Export/Export-Grants/About/what-is-emdg

3.     Research and Development Tax Incentive

The Research and Development Tax Incentive (R&D Tax Incentive) helps to offset some of the costs you put into eligible R&D, as this benefits the wider Australian economy. This tax incentive is for incorporated companies that pay tax in Australia and conduct at least one eligible core R&D activity, and have eligible R&D expenditure greater than $20,000. 

• Companies with an annual turnover under $20 million can claim a 43.5% refundable tax offset against R&D expenditure that amounts to $100 million or less.
• Applications for the R&D Tax Incentive must be made to AusIndustry and requires at least one ‘core R&D activity’ that is essentially an experimental activity designed to generate new knowledge in the form of new or improved materials, products, devices, processes or services

Further information can be found here: https://www.business.gov.au/Grants-and-Programs/Research-and-Development-Tax-Incentive

4.     Minimum Viable Product (MVP) grants

This is a NSW Government grant designed to support promising startups with the funds needed to progress from a proof of concept stage to a minimum viable product. The grants are aimed at startups that are yet to generate revenue to help them engage with a potential business customer, or channel to market, and create innovative solutions that address compelling industry needs or market gaps.

The grant provides:

• Matched funding up to 50% of approved project costs, to a maximum of $25,000

To be eligible, a startup must, amongst other things:

• Have a completed proof of concept (e.g. prototype completed)
• Be at pre-revenue stage
• Hold IP or the rights to commercialise
• Have a potential business customer or business channel to market

Further information can be found here: https://www.nsw.gov.au/support-for-startups/minimum-viable-product-grants

5.     Building Partnerships grants

Note: this grant is currently paused until further notice but may return in future.

This is a NSW Government grant designed to follow on from the MVP grant once the business is generating revenue. It helps revenue generating startups and small to medium enterprises (SMEs) scale or grow strategically through the acquisition of a key customer or channel to market.

The grant provides:

• Up to $100,000 to cover up to 35% of the approved project costs

Approved project costs may include:

• Further developing a product and/or solution
• Progressing early stage commercialisation i.e. product training or product testing
• Acquiring and retaining talent.

Further information can be found here: https://www.jobsfornsw.com.au/funding/startups

Other grants 

There are also various industry specific grants available – too many to list here. A very useful resource is the grants section of the Federal Government Business website, which can be found here: https://www.business.gov.au/Grants-and-Programs

If you would like to discuss grants and other funding sources for your startup or small business, feel free to contact us.