If you’ve got a killer business idea but you’re hitting a roadblock when it comes to funding, a small business grant could be just the ticket you need to get your project off the ground.
To help you get your head wrapped around your options, here’s a quick overview of the different types of business grants available and how to access them.
What is a small business grant?
A small business grant is any amount of seed money that can be used to support a small business. Unlike small business loans, grants don’t have to be paid back – but you usually have to prove that you can achieve a specific goal before being given a grant.
The Australian government financially supports small businesses and startups through hundreds of grants, each with specific eligibility criteria. Most grants are made available by state governments but there are some federal grants available. Some banks and community organisations also offer business grant schemes, although these are less common than government grants.
Rather than offering support in starting a business, most government grants are designed to support business activities such as expansion, training, research and development, importing and exporting. This means you’re likelier to receive a government grant if you have an existing business with plans for expansion or a particular project.
Federal government grants in Australia.
There is a wide range of government grants available to suit different ventures and industries. Some of the most popular grants include:
- ‘The Entrepreneurs’ Programme’ offers funding of up to $1 million to help with productivity, business growth and competing in the marketplace.
- ‘Venture Capital Limited Partnerships’ offers tax benefits such as exemption from capital gains tax.
- ‘The Research & Development Tax Incentive’ is a 43.5% tax offset to encourage innovation in companies of turnover under $20 million.
- ‘Austrade Landing Pad’ is intended to offer assistance to Australian startups in innovative markets like Singapore, Germany and China.
- The ‘Export Market Development Grant’ provides reimbursement for export businesses.
Find out more about grant categories and assistance options at the Australian Government Business website.
What are my other options for business funding?
If a business grant isn’t a feasible option, there are a number of other avenues you can explore to secure funding:
Peer-to-peer (P2P) lending.
P2P lending is a method of financing where you acquire money from an investor through a lending platform. You don’t need to go through an official financial institution like a bank, which means you aren’t beholden to standard market interest rates.
Bank loans tend to be fairly secure and low-risk, but usually need to be secured with an asset like property.
Like P2P lending, private business loans are made by investors (sometimes called “angel investors”) rather than banks. Private loans can be useful for getting access to capital quickly but typically come with higher interest rates than conventional financing, or you may need to exchange funding for equity in your business.
Want more news for small business?
The Yellow Business Hub has a great range of articles on marketing and current affairs for small business. Click through to take a look for yourself.