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Government grants: The “other” lifeline to fund your business
Many start-ups and established small business owners may be familiar with the experience of restrained finances.
Two of the commonly considered options for raising funds are to apply for a loan or find willing investors (the FFF-method; friends, family and fools). But there is an alternative source of capital that many small businesses often do not consider, which under the right circumstances will not even have to be paid back. This source of capital is government grants – from both federal and state sources.
There are a multitude of grants and assistance programs out there to help businesses either get on their feet or launch a commercial idea that just needs funding to take off. For fledgling businesses especially, this “free” money can be a make-or-break infusion of capital.
Now the reason the word “free” is in quotation marks is that government grants are generally targeted to specific businesses. This can be either for certain industries or areas in which the government is keen to encourage innovation and development, or specific groups or types of organisations or activities.
Government departments may also have particular “projects” within their ambit that are budgeted for through funding grants. For example, the New and Developing Plant Industries program, run by Rural Industries Research and Development Corporation, provides funding for the development of new industries based on plants or plant products that have commercial potential.
Then there is Commercialization Australia’s Experienced Executives assistance scheme, which provides up to $350,000 over two years for smaller innovative companies to engage an experienced chief executive or other senior executive talent to ensure a new product, process or service is successfully launched in the market. Funding however needs to be matched by the successful applicant business (for example, $50,000 from the participant and $50,000 from Commercialization Australia).
Obtaining such grants however requires intense homework – a sound business plan, solid numbers, and well-supported research. A trusted adviser and accountant will be essential, so consult this office if you need assistance in applying for a particular government grant.It is also important that any grant money received is used for the purpose originally stated in your application and business plan.
What’s on offer?
There are many grants and assistance programs to search through, but some examples include the New Enterprise Incentive Scheme (NEIS). This can provide eligible job seekers who are interested in starting and running a small business with training, business mentoring and support, rental assistance for up to 26 weeks if eligible, as well as ongoing income support for up to 52 weeks.
The Proof of Concept program will provide successful applicants with grants from $50,000 to $250,000 to test the commercial viability of a product, process or service. Participants have 12 months to complete this component and like the Experienced Executives assistance scheme, participants are required to match the grant funding on a 50:50 basis.
And the Researchers in Business grant supports the placement of researchers from universities or public research agencies into businesses to help develop and implement a new idea with commercial potential. Funding comprises up to 50% of salary costs, to a maximum of $50,000, for each placement for between two and 12 months.
For these and many more grant schemes as well as assistance programs, see the federal government’s Grants & Financial Assistance page.You can also search on Business.gov.au’sGrants Finder, which lists all active schemes by state and territory and provides links to them.
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