Free government grants for small start up businesses

The government in Australia offers a good deal of support to small businesses and start ups across the nation. While there is a lengthy application process and long waiting times with high chances of rejection, the reward for those who get them can be a game changer for their businesses.

Why does the government give free grants for start up businesses?

The government of Australia is committed to helping small and start up businesses get a good start. Since cash has always been a biggest asset for any start up, free government grants can help them access much-needed funding without having to give up any stake in their company. There are over 300 government grants and programmes available for all types of Australian businesses, which can be extremely lucrative in the long run.

What do you need to know about Australian government start up business grants?

There Australian government supports hundreds of grants available to businesses. These grants are worth billions of dollars and come with specific eligibility requirements. Here are some things you should know about government grants for start up businesses in the country:

  • Grants are available from both state and federal governments for different types of businesses.
  • Grants given by the government are usually for specific types of projects and not general businesses. You must have a specific plan for eligibility, which cannot just be a general business plan.
  • For people generally interested in starting a business, there aren’t too many grants available. But if you’re looking to expand, train, import or export, commercialise products or conduct research and development, then you will find specific funding options.
  • The government also offers low-cost or free advice for businesses from a financial and tax point of view. Government assistance can also help businesses access cheaper loans, network with other professionals and get coached or mentored. These government assistance initiatives can prove to be extremely important for start-ups.

If you’re looking to access a government grant, make sure you always go through an official government website to avoid any scams and imitations. Don’t just trust any website without an official URL. You shouldn’t be paying for access if you are looking for a government grant for your start-up business.

Top 5 government grants for small start up businesses that are free

Small business grants
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Here are some of the top government grants you may want to consider for your small business:

Entrepreneurs’ Programme

Replacing Commercialisation Australia in 2014, The Entrepreneurs’ Programme seeks to help small businesses improve their productivity, so they can get more competitive in the sector they operate in. Through this programme, businesses will have access to a huge network of advisors and facilitators in the private sector. Here are some highlights on this grant for small businesses:

  • Entrepreneurs have access to grants from the Business Growth Grants and Accelerating Commercialisation fund. Ventures get up to 50% of their expenditure on a project with a cap at $250,000 for offices and other partner entities.
  • Entrepreneurs can get free advice from industry experts to help them address special issues, so they can accelerate growth. This can be done via Innovation Connections.
  • The programme offers financial support for incubators that help Australian start-up businesses foray into global markets. Existing and new incubators can apply for grants of up to 50% of the value of the project with a cap at $500,000.
  • There are four elements defined where the programme offers support to businesses:
  1. Accelerating Commercialisation – this helps small and medium companies commercialise any new service, process or product.
  2. Business Management – helps businesses access a national network of advisors to improve business practices and explore collaboration opportunities to improve business operations in the country.
  3. Incubator Support – assist existing and new incubators improve success in the global markets by helping them improve business capabilities.
  4. Innovation Connections – experienced facilitators in innovation work closely with small and medium businesses to identify areas where expertise may be required to boost business growth.

The Entrepreneurs’ Programme has already made a mark by helping several Australian businesses succeed.

Export Market Development Grant (EMDG)

The Export Market Development Grant (EMDG) was set up with the intention of helping current and aspiring exporters in Australia across a range of industries. Here are some things you should know about the EMDG:

  • The grant was set up to explore new outbound markets from the country, while encouraging tourism to Australia.
  • Businesses that spend over $15,000 on promoting exports can be reimbursed up to 50% of their costs that exceed $5,000.
  • Each eligible applicant can get up to 8 grants.
  • To qualify for this grant, your business should have promoted a product or service for export that meets the criteria below:
  1. It should be a product made in Australia. If the product is made outside Australia, then the country must significantly benefit from its sale.
  2. Any service (except EMDG-specified ineligible services) including tourism services like accommodation, transport and tours.
  3. Conferences and events held in Australia.
  4. Intellectual property rights that resulted from work done in the country.
  5. Trademark first used or owned in Australia or know-how from work done in the country.
  • Eligible businesses should have a turnover of less than $50 million in the specified grant year.

This key Australian government financial assistance programme is designed to help current and aspiring exporters and is administered by Austrade. Once a business submits its application for the grant, Austrade will check and assign it to an EMDG assessor who will start processing the eligible claim. Once the application has been lodged, there are strict limitations on any additions to the original claim amount.

CSIRO Kick-Start

If a small business or start up wants to partner with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in Australia for research and development, they can get a grant of up to $50,000 (matched funding) to assist with business growth. Here are some things you should know about the CSIRO Kick-Start initiative:

  • CSIRO Kick-Start started in 2017 and is relatively new with the aim of encouraging more innovation in local Australian businesses.
  • The grant aims to boost the research and development stage for start ups and is the ideal choice for businesses testing new ideas, concepts and products.
  • To be eligible for this funding, the business must register for GST in Australia and should have an annual turnover of less than $1.5 million in the last two financial years. The business should also only be registered for a company for under 3 years.
  • Businesses that meet this eligibility criteria will receive anywhere from $10,000 to $50,000 (matched funding). This money can be used to cover the project costs like researcher salaries, travel expenses and accommodation costs. It cannot be used for infrastructure and capital works costs.

Though new, this funding programme is the ideal choice for those looking to innovate and introduce new products and services in the Australian market.

Biomedical Translation Fund (BTF)

If you are planning to start up a business or already run a business in the health space, then you could get funding from the government via the Biomedical Translation Fund (BTF). In total, the government has established $501.25 million towards this fund – a combination of Commonwealth and private sector capital. The fund was established to support the commercialisation of discoveries in the biomedical field and turn any discoveries into high growth potential companies. Here are some things you should know about the fund:

  • The federal government established the Biomedical Translation Fund (BTF) in 2016.
  • The fund has $250 million worth of capital from the government and another $250 million from the private sector.
  • To be eligible for this fund, companies should be in the process of developing or commercialising any discovery in the biomedical field.
  • Most of the employees and assets of eligible companies much be based in Australia, while revenue should be under $25 million over the last two years.
  • Discoveries in the biomedical field can be fairly broad. They can be in pharmaceutical products, therapeutic treatments, digital health services and technologies that are designed with the specific intention to improve the health and wellbeing of people from a commercial perspective.
  • Traditional or alternative medicinal developments are not covered under the grant.

There is no guarantee that every start up with get funded through this scheme. This is up to the discretion of the three fund managers who have been licensed by the government. AusIndustry delivers the fund for the Australian Government’s Department of Health.

Research & Development (R&D) Tax Incentive

The Research & Development (R&D) Tax Incentive has been introduced to help businesses that are in the process of experimenting and undertaking innovative activities to create new products and services related to science and technology. Here are some things you need to know about the R&D tax incentive:

  • Changes were made in 2011 that saw small businesses able to claim refundable tax offsets for any expenses made in the field of research and development.
  • Businesses that ran at a loss would receive a cash rebate as their tax offset.
  • From 2016, a 43.5% refundable tax offset can be claimed for businesses with a turnover of less than $20 million with spend $100 million or less in R&D. Other eligible companies can claim a non-refundable tax offset of 38.5%.
  • For any R&D expenses under $20,000, businesses can claim this tax offset if the research was undertaken with a co-operative research centre or service provider.
  • Mostly, only R&D activities undertaken in Australia will qualify for the R&D tax incentive. However, some activities conduced overseas may qualify if the department of Innovation and Science finds that it meets certain conditions.

This tax incentive has been designed to help all businesses involved in innovation with tax offsets whether they are small or large. The idea is to encourage businesses conduct the kind of research they would not have done otherwise to help boost the overall economy. The Research & Development (R&D) Tax Incentive is jointly administered by the Australian Taxation Office (ATO) and the Department of Industry, Innovation and Science. All R&D activities must be registered before they can claim the tax offset so the department can establish whether the R&D expense is eligible.

How to get approved for a government grant?

Applying for government grant
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Getting approved for a government grant isn’t as easy as it sounds because you might be competing with hundreds of others in the space (it’s a lot like job searching in many ways). Here are some ways to help you get approved for a government grant:

  • Customise your application – Every grant has specific criteria that they are looking for to make sure you are eligible. Read the instructions carefully and customise your application to meet the criteria specified.
  • Address every question if possible – When applying, you need to try and address all questions asked in a thorough and succinct manner. If you cannot answer a question, then the evaluator may consider your business not ready for the grant. Avoid leaving anything blank and answer whatever you can.
  • Plan a strategy – Make sure you’re well informed of all the grants available in your industry and map out the timelines for applying to them so you don’t miss out on any deadlines simply because you were not prepared.
  • Consider specific areas instead of your whole business – Most Australian government grants are tailored to specific business areas and not the whole business. For example, R&D, product development, innovation, and training are all areas that could have grants available. Explore these areas within your business and not in its entirety to find more free funding options.

Additional government programmes for small businesses

Free government grants for businesses
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While these are not necessarily government grants, there are some other programmes that can provide financial assistance and incentives to help small businesses and start-ups succeed. Here are some you might be interested in:

Venture Capital Limited Partnerships (VCLP)

The Venture Capital Limited Partnerships (VCLP) programme looks to attract foreign investors to Australia to provide tax benefits and boost the local venture capital market. Here are some things for you to know:

  • To be eligible, funds should register as a VCLP and make high-risk investments for at least 12 months under the Venture Capital Act 2002.
  • Capital should be infused into companies where the total assets are below $250 million and 50% of the assets and employees should be located in Australia.
  • Some tax benefits for VCLPs include capital gains tax exemption on profits made, claiming of carried interest on capital and flow-through tax treatment.

Before registering for this programme, the government encourages fund managers to get professional tax advice.

Landing Pads From Austrade

The Austrade Landing Pad initiative aims to help start-up businesses in Australia set up successfully in the global market by helping them immerse in one of the five innovation hubs across the world. Here are some things you should know:

  • If a start-up has been accepted into Landing Pads, they will benefit from on-ground hubs in Berlin, Singapore, Tel Aviv, Shanghai or San Francisco.
  • At these hubs, they will receive advice, mentors, investors and access to local business networks.
  • Eligible start-up businesses must have a strong vision for global competitiveness, scalability and differentiation.

Austrade provides space for start-ups to work, but all eligible participants will have to pay for their own travel, living costs, accommodation, insurance, visas and other personal costs.

With so many options for start-up businesses in Australia, there’s no dearth of funding. It requires a little research and innovative thinking for start-ups to access these funds.

Christian Woods
Christian Woods
Christian is a morning reporter and technology columnist for Best in Australia. Christian has worked in the media since 2000, in a range of locations. He joined Best in Australia in 2018, and began working in Melbourne in 2019.
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