Growth funding needn’t only come from private investors. The Australian Government, particularly since its Innovation Agenda announcement, can also be a good place to turn.
If you’re interested in growing your business and are wondering whether Government funding might be available, just visit the website business.gov.au. Click the ‘Grants & Assistance’ box and you’ll be guided directly to a web-based tool that quickly runs you through a series of simple questions about your business. It’s a process that takes no longer than 60 seconds, and it could be exactly what you’re looking for.
Once you have answered the questions, the various options available to you are laid out clearly. They will likely include tax incentives for research and development activities, venture capital programs, incubator support, entrepreneurs’ programs, local industry network programs, industry skills funds and much more.
The various offerings cover a lot of different business needs, but they’re not for every purpose. If you simply want to build a new website, boost your marketing budget, advertise to employ more people or do some other form of generic business activity, you won’t find grant support, however a range of information guides are available elsewhere on the website. Government grants and assistance programs, and particularly Federal Government programs, are generally targeted towards innovation, entrepreneurship and research and development.
“The main characteristics of a business we will support are around the undertaking of research and development,” says Tim Cotter, Regional Manager, AusIndustry Business Services. Cotter is one of numerous government contacts around Australia whose role is to work with local businesses to figure out how the Australian Government can, or cannot, offer assistance.
“If you’re registering your own activities, you register them with AusIndustry and put your tax schedule in when you do your tax return. As long as you’re a registered company and you’re doing eligible R&D activities then you may be able to claim in that program each year, from start-ups right through to major corporates.”
“The next form of incentives from Government are in and around the Entrepreneurs Program. This is for businesses with revenue of over $1.5 million and up to $100 million. We hire around 100 business advisers around the country who work to help grow these businesses. In this case you need to have a business with real prospects for growth.”
There is support for all levels of business, Cotter points out. It’s not all about established companies. Potential grant recipients may be at start-up stage. Once they have finalised a prototype and are then facing the range of processes involved in bringing their product to market and protecting their intellectual property etc, they may be eligible to enter an Accelerating Commercialisation program. This includes grants that match your own spend, dollar for dollar, up to $1 million.
“We have contracted a series of commercialisation advisors who work with the client to help make their business a success,” Cotter says. “That’s a great opportunity for someone who’s invented something, or who has some great IP but who doesn’t know how to get it into the market and get the full value out of it.”
Interestingly, the Government has also changed tax rulings around investing in early-stage companies, in order to make such investing more attractive. An investment of up to $50,000, for instance, receives a 20 per cent tax deduction. For more sophisticated investors who back businesses to the value of up to $200,000 annually, the same percentage of deductibility applies. In both cases there is a 10-year capital gains tax exemption.
“An investor might want to back a local, early-stage innovative company and get a tax rebate. Then, if the business grows in size and value, they get the capital gains exemption,” Cotter says. “We’re trying to encourage a spirit of investing in Australian entrepreneurs and innovators in order to increase the flow of ideas and turn those ideas into real offerings.”