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Am I making the most of government funding?

gOVERNMENT FUNDING

It may come as a surprise to some, that the government provides a significant amount of funding and support through grants and incentive programs. In fact, over 700 programs, offering $50 billion of government funds are available at state and federal level. Many businesses simply do not know where to start, or have the time to trawl through all of the programs available. To make matters worst, grant programs are constantly changing and have opening and closing dates.

So where do you start?

FIRST,

be aware of some of the entitlement/incentive programs which are well established, and highly accessed such as:

  • The R&D Tax Incentive (administered by AusIndustry and the ATO, currently running at $2.5b)

    • It aims to encourage industry investment in research and development (R&D).

    • It provides businesses undertaking R&D activities with an additional tax benefit. This can be refundable for up to 45% of the expenditure relating to R&D activities. More on this here.

  • The Export Market Development Grant (known as EMDG) (administered by Austrade, estimated total funding pool of $175m)

    • It aims to encourage small and medium Australian businesses to develop export markets.

    • It reimburses up to 50% of eligible export promotion expenses above $5K up to $150K. It can be accessed up to 8 times, although performance measures apply after the first application. More on this here.

SECOND,

investigate grants and incentives that will align to your business strategy, rather than changing your strategy to suit. Talk to government, advisors, and carry out your own searches via websites such as the government's Grant Finder, and GrantGuru which is free to access.

For example, at a state level: 

  • If you are just starting a business in Melbourne there are the Melbourne City Start Up and Business Expansion Grants ($300k budget). These can be used to fund establishment costs. More on this here.

  • There are also several grants available through Business Victoria, click here.

At a federal level, the government's flagship program to improve business competitiveness and productivity is the Entrepreneurs Infrastructure Program. It offers three streams with one of the most attractive being:

  • Accelerating Commercialisation (administered by AusIndustry, estimated at $30m)

    • It aims to assist with funding the costs associated with bringing novel products, processes and services to the market.

    • The maximum grant is $1M so based on the requirement for 50:50 funding, projects up to $2M can be considered. More on this here.

There are many other grant programs out there, however, those discussed above should serve as the best starting point. 

THE FINE PRINT:

The R&D Tax Incentive provides more short term certainty of funding being received, however, companies are audited retrospectively by AusIndustry and/or the ATO. Record keeping is important. This program is often misunderstood, and companies often: miss out on entitlements, attract audit attention, and overlook complex legislative provisions, which may deem them not eligible, or significantly restrict the benefit which can be accessed.

Grant money is not free money. Considerable time is involved in compiling a grant application, and there is no guarantee that there will be a successful outcome. Grants typically require you to match the funding you seek, provide funding that is assessable income, and must be spent in accordance with terms and conditions.

The general rule with government funding is no double dipping on the same dollar of expenditure. 

A PICTURE SPEAKS A THOUSAND WORDS,

so here is one that shows how accessing government funding programs can be done from business inception, through to various phases:

KEY TAKEAWAYS:

  • Awareness - Awareness and developing a grants and incentives strategy which aligns to your business strategy and direction is key. For example, you may wish to develop a calendar which tracks upcoming grants and entitlement programs which you are considering for the next 12 months. Leverage consultants and free search websites to assist you.

  • Assessment - Research and understand how a particular program operates. Critically assess its criteria and how you will be able to mount a compelling case. Try to gauge the effort required to access versus the benefit.

  • Ability - You will need to make a convincing case about why you should receive funding, recognise if you have the skills and time required to do this yourself. Engage experts as required.

Talk to us today about how we can help you access government incentives and grant programs such as those outlined above.