Any start-up founder or small business owner will tell you that one of the biggest challenges that they have had to grapple with in their business journey is getting their hands on the capital to get the wheels spinning. Cash flow runs the business. It acquires the merchandise, pays for the premises and funds the operations. It is the lifeblood of the business; as soon as the funds dry out, you can expect the business to wind up its operations. Fortunately, in Australia, there are a host of business grants that small businesses or start-ups can leverage in order to get the shot in the arm that they will need to keep going. Here is an overview of some of the top business grants that your business can take advantage of this year:-
In 2014, the Entrepreneurs’ Programme was rolled out by the government in place of the Commercialisation Australia and the Innovation and Investment Fund in order to assist Aussie businesses in improving their productivity and competitiveness. The programme provides Australian businesses with access to a nationwide network of facilitators and private sector advisers.
Entrepreneurs interested in taking advantage of the programme can access grants through the Accelerating Commercialisation fund as well as the Business Growth Grants. The Accelerating Commercialisation Grants finances up to 50% of expenditures for a projects with a maximum funding of $250,000 for commercialisation offices and other partner entities and a maximum of $1 million for other categories of applicants.
Entrepreneurs can also use the Innovation Connections programme to solicit free advice on their business ventures and fill in the knowledge gaps that will help steer the business to greater growth. The Innovation Connections initiative avails funding to start-up founders to help them break through into the global markets. The funding covers up 50% of project value with maximum funding of $500,000.
R&D Tax Incentive
The goal of the R&D Tax Incentive is to foster a culture of innovation to benefit Australia through a tax offset that covers a host of eligible research and development projects. Companies that have an annual turnover of under $20 million are able to claim a 43.5% refundable tax offset for their R&D expenditures running up to $100 million.
The incentive offers all companies a non-refundable tax offset of 38.5% and companies are allowed to carry this forward into the future income years. There are various core activities that fall under eligible R&D activities. These range from the research and development initiatives carried out for the generation of new knowledge, products and materials to the supporting activities for these initiatives. Companies that are eligible for this incentive must register their research and development activities with the Department of Industry, Innovation and Science before they begin lodging their tax returns and claiming the tax offsets.
Export Market Development Grant
The Export Market Development Grant (EMDG) is a grant scheme that is administered by Austrade and incentivizes Australian exporters by reimbursing them for the expenses incurred for their export promotional activities.
Both aspiring and existing Australian exporters that spend more than $15,000 can apply for a 50% reimbursement of the costs incurred up to a maximum of $150,000. The grant covers various promotional ventures such as trade events, free samples, marketing travel, registrations and insurance, overseas marketing representatives, intellectual property and other related export promotional costs.
Venture Capital Limited Partnerships
The main goal of the Venture Capital Limited Partnerships (VCLP) programme is to attract foreign investors into Australia and inject fresh life into Australia’s VC market by dangling attractive tax benefits to these foreign firms. To qualify for these incentives, the funds will need to register as VCLP under the Venture Capital Act 2002. They must also have made some high risk investments in Australia that will hold for at least 12 months.
The funds make investments in ventures with total assets worth $250 million and half of those assets must be based in Australia. 50% of the fund’s employees must also be based locally.
There are various tax benefits that can be accrued from the VCLP. These range from the exemption from the capital gains taxes on the venture capital firms’ share of profits that are accrued from partnerships to a flow-through taxation treatment. The funds are also able to claim an accrued interest on the capital account rather than claiming interest. Before you take advantage of the Venture Capital Limited Partnerships programme, it is advisable to seek professional tax advice.
Business Development and Assistance Program
The Business Support and Assistance Program offers business support and funding to the Aboriginal or the Torres Strait Islanders that want to start a business or grow their business through asset leasing and concessional loans. The financial support is given as working capital or for start-ups. It can also be provided for buying existing businesses, equipment, plant as well as any other commercial asset for the business.
Austrade Landing Pad
The Austrade Landing Pad is an initiative aimed at giving Australian start-ups a launch pad into the global market by putting them through any of five world-class innovation hubs. The program accepts start-ups into Launching Pads in five global cities including Tel Aviv, Berlin, San Francisco, Singapore and Shanghai. Businesses leveraging this platform can benefit from the local presence in any of these five markets while also tapping into the access to mentors, networks, investors and talent.
Startups that are accepted into the Austrade Landing Pad must display a strong vision, differentiation, traction and scalability in their model. They must also show how the Landing Pad is going to benefit them in 90 days.
The platform not only offers workspace in an accelerator but also an array of free services. However, participants in the program must foot the living costs, accommodation, insurance and visa.
Want to learn more how you can leverage government incentives, grants of private grants for your business? Contact an accountant Melbourne professional to offer you guidance and assistance that will help you tap into these opportunities and move your business forward.