Issue 0009 Identifying Government Grants That Can Assist You In Your Business
Government grants can benefit many SME businesses
In difficult times, being able to access government grants can significantly benefit many small/medium enterprise business operators. Unfortunately, there seems to be a significant problem, within small/medium business operators, on being able to identify where the various government grants are and how you go about applying for them.
Government grants in Australia are issued by the Australian Federal government, every State and Territory government and some local government organisations. There’s a wide range of organisations and units within government departments that are facilitating grants for small/medium enterprises.
The big challenge for many of you in business is identifying who is handling the grants and, indeed, what grants are available.
Each year, there are over $5billion worth of grants and incentives issued in Australia, primarily targeted at small/medium enterprises. Are you receiving your fair share of those grants? After all, each and every small business operator is making a contribution to the pool of money that is funding those grants, through taxation and other financial payments you are making into the governments.
Some of you would have undoubtedly found out about grants, because of memberships of organisations, which alerted you to the existence of particular grants. But a large number of small business operators do not appear to be able to identify where they can access grants.
Accountants, offering a business advisory service, can assist in identifying grants for their small/medium enterprises clients.
Some Grants That Are Available For Small Business Operators
There’s a wide range of grants, some of which are summarised as follows:
Research and Development
This grant is available for companies with turnovers under $20million. There is also a component for companies with turnovers over $20million. However, we are only concentrating on the small/medium enterprise market at this stage.
The company can gain a 45% tax rebate on their research and development expenditure. Research and development expenditure include salaries and wages paid to people who are actually involved in research and development processes.
To claim the research and development rebate, you have to register with AusIndustry each year. The registration has to be submitted by 30 April in the following year, or the date of lodgement of the company’s income tax return, whichever is the earlier.
The minimum expenditure to claim research and development rebate is $20,000. There’s a potential tax rebate of $22,500 for a business that is spending $50,000 on research and development. You can also claim the rebate if your company is currently trading at a loss. The Australian Taxation Office (ATO) will process the cash rebate and will deposit the rebate into your company’s nominated bank account within 30 days of the company’s lodgement of their income tax return.
Export Market Development Grant
Can assist the ‘would be’ exporters and businesses already involved in export, with turnovers of under $50million (company’s overall turnover). This expenditure can be undertaken by a wide range of entities, not just companies.
To be eligible, the business must have spent in excess of $20,000 in the financial year. There are 13 major expenditure categories for which expenditure can be claimed for Export Market Development Grant. The overall benefit of the grant can range from $10,000 to $150,000.
The Export Market Development Grant application has to be lodged by no later than 30 November each year. However, you can lodge it very early in the new financial year, towards the end of July and, depending on the amount of your claim, you will receive either the whole grant payment or a proportion of it approximately five to six weeks after the lodgement of the Export Market Development Grant application.
There are some real benefits in making sure that, if you are an exporter, or a potential exporter, you are recording all of your costs related to export activities, so you can substantiate a claim being submitted to Austrade.
Enterprise Connect is arguably the largest grant available, on a numeric basis, for small businesses in Australia. The grant covers a wide range of industries and can also apply to some associated businesses that might be doing work for those industries, as long as 50% or more of the activities relate to one of 12 named industries within Enterprise Connect.
The industries that Enterprise Connect supports are:
• Food and Beverage Manufacturing
• Clean Technology
• Resources, which incorporates Mining, Oil and Gas
• Creative Industries, which covers a wide range of business activities, including:
- Performing Arts
- Visual Arts
- Interactive Contents or related industries
• Defence Industry Contractors – there are thousands of these types of businesses around Australia, all servicing various aspects of the Australian Defence Industry
• Tourism Sector – which is a bit restricted and includes:
- Tourist Accommodation
- Tourist Attractions
- Local Food and Beverage Tasting Experience
- Operation of Tours
- Travel Agency Services
• Printing Industry
• Publishing Industry
• Information and Communications Technology (ICT)
• Transport, Freight and Logistics
• Some Professional Services, including:
- Scientific Research Services
- Architectural, Engineering and Technical Services
- Advertising Services
To be eligible to apply, the entity has to be a company or a corporate trustee acting as trustee of a trust.
Each of these industries has to have a minimum turnover, which ranges from $1million to $1.5million. For businesses, which are situated in remote and very remote locations, the minimum turnover is only $750,000 and the business entity can be any type of entity.
The types of grants that are available are up to $20,000, on a 50% basis, virtually for any type of work undertaken, such as:
• redesigning a factory;
• waste management review;
• Workplace Health and Safety reviews;
• developing a systems’ manual;
• business plans;
• strategic plans;
• human resources plans;
• cashflow forecasts; and
• helping with the development of the management team within your business.
Commercialisation Australia is a major grant that is available to small/medium enterprises. It’s divided into four concepts:
Skills and Knowledge
This is for businesses that have developed a new product, process or service and need some assistance in undertaking market research, checking out potential patents, some intellectual property advice, preparation of a business plan and preparing budgets and cashflow forecasts.
The grant is an amount of up to $50,000, on an 80% grant basis.
Proof of Concept
Proof of Concept is available to assist someone who has developed a product, process or concept, to get the business a little bit closer to achieving their first commercial sale.
The grant can range from $50,000 to $250,000, on a 50% grant basis.
Experienced Executives is available for business that will benefit from employing an experienced chief executive officer and/or chief financial officer, to assist in getting a new business venture ‘off the ground’. This will come in very handy for a young entrepreneur, who has a great idea on how to invent a new product, process or service and needs a helping hand to assist in getting the product, process or service into the market.
These grants are available for companies with turnovers of up to $10million. An applicant can be an individual or a partnership when the application is made, however if you are admitted into the Commercialisation Australia process, you have to agree to become a company before you receive any funding.
Early Stage Commercialisation
The Early Stage Commercialisation grant is a major grant within the Commercialisation Australia stable. Grants range from $50,000 to $2million, on a 50% grant basis. This grant can help a company into the marketplace, funding things like building a pilot plant and undertaking further work in research, to improve the company’s product prior to making the first commercial sale.
Applications for Early Stage Commercialisation Grant can be submitted by companies with turnover of up to $50million.
This is a brief introduction of some of the grants which are available. The grants summarised are all Australian government grants. There are also a wide range of grants made available by the Federal and State governments, joining together to primarily administer disaster grant schemes. These grants are primarily available for primary producers and small business operators, following an actual disaster.
Accountants Can Assist
Accountants, who are offering business advisory services, can assist their clients to identify government grants. Many of them are subscribers to our other package, ESS BIZGrants.
ESS BIZGrants assists accountants to identify grants for which individual small/medium enterprise businesses might be eligible.
In the first instance, it is advisable for you to approach your accountant and ask whether they are prepared to assist you with the identification of government grants. If they are unable to assist you, because they are not offering grants advice, please send an email to with your location and postcode and we will send you the names of accountants within your area, who are offering these types of services.
ESS BIZTOOLS has developed hundreds of articles and other templates, to assist small business operators to improve their business operations. A complimentary copy of our article, ‘Using Government Grants To Fund Your Business Improvements’ is available below:
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Episode SHSB009 Identifying Government Grants That Can Assist You In Your Business
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