No matter what stage your startup is at, maximising your profits is important. Government grants are subsidies provided to eligible businesses in the form of financial support. It is wise for any startup to take advantage of government grants, using them as a way to help propel their startup into financial success without giving away too much equity through external investment.

In Australia, there are many government grants that your startup may be eligible to receive. In this article, we will provide a list of the most popular government grants for startups in Australia, including information about business eligibility.

1. Entrepreneurs’ Programme

The Entrepreneurs’ Programme aims to aid businesses with productivity and competition. It does this by supporting entrepreneurs through several streams, including the:

  • accelerating commercialisation stream;
  • business management stream; and
  • innovation connections stream.

Each stream has a separate grant. Startups apply for each stream individually, depending on what they are eligible for.

Accelerating Commercialisation

The accelerating commercialisation stream provides access to experts who can assist your startup with developing commercialisation strategies. Additionally, the government will provide your startup with matched funding to cover commercialisation costs. To be eligible for this grant, your startup must have a:

  • novel product;
  • process; or
  • service that you are seeking to commercialise.

Business Management

The business management stream provides entrepreneurs with access to business advisers. The advisers assist startups by providing:

  • business evaluation: the adviser will review your business’ operations and plans. They will then provide you with a report detailing their assessment of your business, and suggestions for improvement;
  • supply chain facilitation: the adviser will provide advice on your supply chain and will support you in providing access to new opportunities and markets; and
  • growth services: the adviser will assist your startup to develop a business plan to accelerate your growth and to help facilitate this through their networks and expertise.

Among other eligibility requirements, your startup also must be operating in a government specified growth sector. Currently, these are:

  • advanced manufacturing;
  • food and agribusiness;
  • medical technologies and pharmaceuticals;
  • mining equipment, technology and services; or
  • oil, gas and energy resources.

In addition to the above, your startup must provide enabling technologies and services to one or more of the above growth sectors. Further, your startup must also have an annual turnover or operating expenses of between $1.5 million and $100 million. Finally, your startup must have been trading for three years.

Innovation Connections

Similarly, the innovation connections stream connects your startup with an innovation facilitator who assists your startup in identifying opportunities and solutions through a report.

Additionally, if you then desire to implement the facilitator’s recommendations, you can apply for a further innovations connection grant.

2. CSIRO Kick-Start Program

The CSIRO Kick-Start Program provides eligible businesses with matched funding to undertake research activities with CSIRO (Commonwealth Scientific and Industrial Research Organisation). These activities include:

  • coming up with a new idea with commercial potential;
  • developing a novel or improved product or process; or
  • testing a novel product or material.

As part of the program, CSIRO will:

  • identify relevant research;
  • connect the business to a researcher;
  • assist with the research project throughout.

The business is required to match the funding that CSIRO provides, which can be between $10,000 and $50,000. To be eligible for the CSIRO kick-start program, your startup must have:

  1. an annual turnover and operating expenditure of less than $1.5 million; or
  2. been registered for less than three years.

3. Export Market Development Grant

The Export Market Development Grant provides businesses with financial support. They do this by reimbursing up to 50 per cent of certain expenses. This reimbursement is up to a maximum of $150,000. Most importantly, these expenses must be for promotional activities relating to exports.

The key eligibility criteria for obtaining an export market development grant is that your company must:

  1. carry on export promotion activities; and
  2. promote their products to other countries.

4. Research and Development Tax Incentive

The Research and Development (R&D) Tax Incentive is a valuable tool for companies that undertake eligible research and development activities. The R&D tax incentive provides eligible companies with a refundable tax offset. This tax offset is in the form of a:

  • cash back on their R&D expenditure; and
  • non-refundable tax offset for larger companies – this being a reduction in their income tax liability to nil.

If your company is eligible for this incentive, you can offset some of your costs of eligible R&D activities by 43.5 per cent or 38.5 per cent depending on your annual turnover.

5. Early Stage Venture Capital Limited Partnerships Incentive

Another tax incentive that can significantly benefit your startup is the Early Stage Venture Capital Limited Partnership (ESVCLP) Incentive. To be eligible for this incentive, you must be an ESVCLP, which means that your structure must be either:

  • a limited partnership; or
  • an incorporated limited partnership that has existed for between five and 15 years.

ESVCLPs will typically invest in companies at an early stage and in accordance with their investment plan. The incentive provides ESVCLPs with beneficial tax treatment, including:

  • limited partners eligible for a tax offset on the initial investment (10 per cent);
  • flow-through taxation treatment – that is, the ESVCLP is not taxed at all and income and gains flow directly to partners; and
  • a tax exemption for limited partner investors on the profits and gains they make within the partnership.

6. The Advancing Renewables Program

The Advancing Renewables Program provides eligible businesses with funding and financing to further their development of renewable energy technologies. The program provides funding to businesses that are undertaking contributions toward:

  • reducing the cost of renewable energy;
  • increasing the value of renewable energy;
  • improving the technology and commercial readiness of renewable energy;
  • reducing barriers to renewable energy uptake; and
  • increasing skills, capacity and knowledge that is relevant to renewable energy.

The program provides eligible businesses with a grant of between $100,000 and $50 million. This grant needs to be matched by the company. To be eligible, your startup must involve:

  1. a renewable energy technology; or
  2. methods that can contribute to the renewable energy program outcomes.

7. Landing Pad Programs

The Landing Pad Program is neither a grant nor an incentive, however it can provide your company with a valuable opportunity to innovate. The program provides startups with an opportunity to work for up to 90-days internationally in an innovation hub within a startup accelerator.

Through this program, your company will have an opportunity to access:

  • mentors;
  • investors;
  • customers; and
  • other opportunities and facilities to better develop your startup’s resources and expertise.

To be eligible, your startup must be:

  1. at a stage where you are ready to enter the market; and
  2. able to fund your costs associated with the travel.

Key Takeaways

As Australia’s startup scene continues to thrive, the Australian government has made strides in assisting entrepreneurs to take advantage of the growing economy. The government has created a number of grants, incentives and programs that are targeted to startups. Above all, these give startups and entrepreneurs the opportunity to receive:

  • partial funding;
  • tax incentives; or
  • access to resources and facilities.

If you are eligible for one or more of these opportunities, your company can use these to invest more money into research or to reduce your expenses. If you have any questions, contact LegalVision’s startup lawyers on 1300 544 755 or fill out the form on this page.

Maya Lash
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