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What are business grants and how can you get one?

ANZ Financially Ready

2024-05-20 04:30

Key points

  • A business grant can be a fantastic way to start or grow your business.
  • There are several important points to consider when looking to apply. 
  • Applying for a grant can be complicated, but help is available if you need it. 

A great way to give your new business a cash boost is by applying for a business grant. This type of funding can help you turn your business idea into a reality or grow an existing business.

Business grants come in all shapes and sizes. To get one, you’ll need to meet certain criteria, apply for the grant, and ideally have a successful outcome. It’s a lot of work, but if you’re successful, the money to advance your business is worth it.

If you’re wondering if a business grant is a good idea for your small business, then you’ve come to the right place. We’re going to explain how grants work, who offers them, and how you can find one that’s right for your business.

What is a business grant?

In a nutshell, a business grant is a form of funding that you can apply for if your business accomplishes the purpose for which the grant is offered. Grants are designed to help you create, grow, or advance your business. Once you get the money, you don’t have to pay it back like you would a business loan. You do, however, need to use the money the way you said you would in your grant application.

How can a grant help your business?

All grants have a specific purpose. Whether it’s advancing an industry through research and development (R&D) or supporting the wider community, it’s important to apply for a grant that aligns with your business’ needs and goals.

For example, a small business specialising in technology might apply for an R&D grant to support their work in creating a new software that’s not on the market. Or, if your business is affected by natural disaster. You may even be able to find grants available to help you start or run a business in a particular council area.

Who provides the grants?

The biggest business grant providers are the federal, state and territory, and local governments:

  • Federal government grants typically focus on helping businesses grow key sectors and industries through innovation.
  • Business grants from the state and territory governments will usually be a combination of innovating in key industries and supporting local businesses and communities.
  • Local councils will provide funding from a grant to support local businesses that will benefit the community, such as providing a grant that will boost the night economy.

Business grants can also come from private companies. These grants are usually for businesses that are innovating or leading in a specific area or industry.

How can you apply for a business grant?

You’ll need a strong grant application to be successful, as you’re often competing with other businesses for the same grant.

All grants come with a selection criteria, which are boxes that the grant provider will be ticking to ensure you’re eligible. Thoroughly review the criteria to check that your business aligns with it. From there, you’ll need to write a detailed proposal, which usually includes:

  • Cover letter: This covers information about your business, the purpose of the project and why you need the funding.
  • Statement of need: This explains the specific industry, business, community, or public need that your project or business will address.

You will, of course, have to provide details about your business, such as your business contact information. And you might need to provide specific business information too, such as cash flow reports, profit and loss statements, or, especially for a new business, a detailed plan for how you’re going to use the money.

Writing a solid grant proposal is a skill – it may take many attempts to nail it. If you’re not feeling confident in taking on this huge task, then you can outsource the work to a company or freelance copywriter who specialises in writing grant proposals.

What type of business grants are out there?

From the Australian Government alone, there are more than 600 different grants available in a number of industries. Of course, these grants each come with their own requirements and fill specific niches.

To make the grant-finding journey a bit easier, you can use the Australian Government’s grant finder tool to look for any available grants you might be eligible for. You can also visit the website of your state or territory government or local council to see if they’ve got any grants that are open for applications.

So, what are the different types of business grants? This list reflects some of the many business grant categories that are available to Australian business owners:

  • Start-up grants
  • Arts and culture grants
  • Innovation in technology grants 
  • Environmental and sustainability grants
  • Grants for industry-led research
  • Job creation grants
  • Rural and regional grants 
  • Grants to support underrepresented populations
  • Manufacturing grants (purchasing equipment)
  • Grants supporting businesses affected by economic downturn or natural disaster
  • Training and skills development grants
  • Research and development grants, such as an R&D tax incentive

Other ways to fund your business

Not every business will be eligible for a grant, and that’s okay! There are other ways to fund the growth and innovation of your business, which include raising outside capital from investors or crowdfunding.

If you want to have more certainty in getting money for your business, then taking out a business loan might be the way to go. Unlike a grant, you will need to pay back the money you borrowed over time on top of interest, so it’s best to chat with your accountant about whether taking out a business loan is right for you.

Next steps

Want to explore your grant options? Then head to the grants and program finder on the Australian Government Business website. It’s easy to use and can help you find a grant that’s applicable to your business.

And make sure you have your ducks in a row with a rock-solid, detailed business plan.

What are business grants and how can you get one?
Business specialist
ANZ Financially Ready

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