Last editedJune 20204 min read
If you’re starting a new business, finding funding to kickstart your company’s cash flow is likely to be top of your agenda. Fortunately, there are a broad range of government and non-government grants for small business that can give your company the edge and set you up for long-term success. While there are an enormous number of small business grants to take advantage of, the application process can be lengthy, complex, and intensely competitive. We explore the different types of small business grants in Australia and look at how you can give your business the best chance of winning your chosen grant.
Small business grants explained
Before we start exploring the various types of small business grants in Australia, let’s look at what a “grant” is in a little more detail. Essentially, it’s a sum of money given to a business or non-profit organisation that doesn’t need to be repaid. Because of this, as well as the fact that small business grants don’t require you to give up any equity in your company, they’re an immensely attractive type of start-up finance for many start-ups and SMEs.
In most cases, small business grants have very specific requirements. You’ll need to be based in a specific region of the country, run a specific type of business, occupy a specific sector of industry, or cater to specific community groups to qualify for many grants. For example, the Indigenous Business Development Program NT is specifically available for indigenous people based in the Northern Territory who want to start their own business or grow an existing business.
Small business grants in Australia can vary significantly in size and scope. Some are worth several hundred dollars, while others may be worth millions. In either case, the application process is likely to be complex and competitive, with many different companies vying for the same pot of money. That’s why it’s a good idea to narrow your focus to a couple of grants that your business is perfect for and spend a considerable amount of time getting the application spot on.
Broadly speaking, there are two main sources of funding when it comes to grants: private and governmental. Here’s a rundown of the different types of small business grants in Australia.
Government grants for small business
If you’re seeking government funding, there are a range of programmes that you can pursue:
Direct grants – A direct grant is the most basic type of grant. In essence, it’s a lump sum given directly to a business for a specific project. There are many national and state/local government grants for small business that your business may be eligible for. For example, the Entrepreneurs’ Programme aims to stimulate business growth and competition with funding of up to $1 million.
Tax incentives – Free government grants for small business start-ups don’t just come in the form of a cheque, but also in tax incentives. For example, the Research and development (R&D) tax incentive provides a tax offset for companies that engage in R&D activities that benefit Australia.
Wage subsidies – Another key type of Australian government small business grant is a wage subsidy, which provides a financial incentive for businesses to employ certain people. For instance, the government’s Restart initiative provides an incentive of up to $10,000 for businesses to hire and retain employees who are 50 years of age and over.
To get a better sense of the broad range of Australian government small business grants, take a look at this comprehensive database put together by business.gov.au.
Private grants for small business
There are also many private small business grants that your business could qualify for. Whether set up by philanthropists or not-for-profit organisations, private small business grants are just as viable as government grants for small business. Some banks also offer grant schemes for charities and local businesses across Australia. To find out more about the different schemes that may be available, getting in touch with your local branch could be a good idea.
Tips for the small business grant application process
Once you’ve settled on a couple of different grants that your business is right for, it’s time to make the application itself. Detailed instructions on how to apply are determined by the specific grant that you’re applying for, but there are plenty of ways to maximise your chance of success. Here are five of our top strategies to boost your chances of securing a small business grant in Australia:
Prepare properly – Before you begin the application process, you’re going to need to produce a couple of key documents, including a thorough business plan, a work plan, and a detailed account of your company’s history. Once you’ve got all these documents ready to go, you should have a good shot at securing the grant you’re after.
Consider the cost – Although people sometimes describe grants as “free money”, that’s not entirely true. Many small business grants will require you to match the amount of money put forward by the grant. If you can’t contribute 50% to the cost of the project, your application may be dead on arrival.
Apply as soon as you can – The best time to apply for a small business grant is yesterday. The second-best time is today. Time your application so that you apply for the grant when it first opens. That way, the full fund will still be available and fewer businesses will be aware of it, meaning that there’s less competition for funds.
Customise your application – If you’re applying for multiple grants, there’s always a temptation to recycle your answers. That’s a bad move. The aim of the game is to show the awarding body that your business is a perfect fit for the grant, but that’s going to be difficult if you’re reusing answers intended for an entirely different set of objectives. Explain in detail how you’ll use the grant money and why your plan meets the objectives of the grant.
Hire a professional – In some cases, an Australian government small business grant may be large enough to justify hiring outside help. There are plenty of grant consultants who can help you draft and submit your application, while also providing you with feedback on what makes an application stand out from the crowd.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.