Small Business Finance: Accessing Federal and State Government Grants
How can small businesses access the vast array of Federal and State Government grants specifically designed to support and promote their growth in small business finance?
While most grants have limited benefits, there are two notable grants that provide significant assistance to many companies: the Export Market Development Grants and the Research and Development Tax Incentive. This article will explore these grants in detail and discuss the steps small businesses can take to access them.
Export Market Development Grants
The primary objective of these Export Market Development Grants is to provide valuable support to businesses in their efforts to expand their exports to various international markets (excluding New Zealand, Iran and North Korea).
To promote exports, it provides a taxable grant based on eligible expenditures (including overseas market visits, overseas representation, communication costs, marketing consultants, free samples, trade fairs, trademarking, etc.).
It focuses on promotional activities and does not assist in the general establishment of a product or business.
The administration of these grants falls under the responsibility of Austrade, the Australian Trade and Investment Commission. Austrade plays a crucial role in overseeing and facilitating the disbursement of funds to eligible entities. The eligibility criteria for accessing these grants extend to a diverse range of entities, including companies, trusts, and sole traders. This inclusive approach ensures that various businesses and ventures operating in Australia can benefit from Austrade’s support in fostering economic development and international trade relations.
The grant structure is based in a calculation that considers 50% of eligible expenditures of more than $15,000 annually. The minimum grant is $5,000, and the maximum is $150,000. This provides an opportunity for businesses with higher eligible expenditures to access a more substantial funding boost in the realm of small business finance.
Research and Development Tax Incentive
The Australian Tax Office offers the R & D Tax Incentive. For companies with a turnover under $20M, the R & D Tax Incentive is a 45% refundable tax offset of eligible research and development expenditure. However, the net benefit reduces to 15% if the company is profitable. A tax credit is paid out as cash. Companies with a turnover exceeding $20M receive tax credits of 10%.
Only companies are eligible, not trusts or sole traders. To be eligible, companies must register annually with AusIndustry and spend a minimum of $20,000 on eligible development expenditures.
You may have read about other incentives in the past. Please note that the May 2014 Federal Budget has dispensed with the Commercialisation Australia and Enterprise Connect incentives.
If you want to explore opportunities in accessing these grants for small business finance, the Kreston Stanley Williamson team is here to assist you. Please don’t hesitate to contact us for guidance and discussion.
*Correct as of July 2014
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek specific advice relating to your particular circumstances. Liability is limited by a scheme approved under professional standards legislation.