What You Need to Know About Business Grants in Australia

By: Paul Raymond0 comments

One of the primary reasons why 90% of startup businesses fail is due to lack of funding. As a business grows, so does its capital needs. Most financial institutions like banks find it difficult to finance small businesses because they lack a proven credit history or a track record of being in existence for two to three years.

Even with a good business idea and a solid plan of activities, most financial institutions find it riskier to finance startups because there is usually no evidence of succeeding. Without this surety of business success, the chances are that these firms may not repay their loans.

Importance of small business grants

You can never underestimate the contribution of small enterprises in the Australian economy. According to recent studies, these businesses create a majority of employment opportunities in the private sector. With these contributions to the economy and the expansion of business opportunities, there is meaning and sense as to why the government should support their activities.

Small business grants in Australia will:

Encourage many people to start up their businesses

Capital is usually the greatest barrier to many aspiring entrepreneurs. With these subsidies, the government helps facilitate and encourage individuals to start their businesses and reduce unemployment rates in the country.

Contribute to the GDP

If so many people start their businesses, the rate of unemployment will go down. With increased employment opportunities, there will be a significant contribution to the country’s GDP and tax base leading to improved growth and development.

Reduce overreliance on the leading industries like mining

With the so many employment opportunities and contribution to the tax base, the state will reduce reliance on the leading corporate and large scale industries as they will not be the only source of revenue to the country.

Encourage banks to give business loans to startups

Financial institutions find it risky to finance small businesses with no credit history or evidence of success. The government hopes to get banks more involved by giving grants to these firms to help them grow and expand.


How it works

The money given to business owners may be limited, but it opens up many opportunities. The business grants will help entrepreneurs achieve their dreams of working in more flexible environments and being their bosses. This money goes up to the start up needs of business. The grant helps these companies buy inventory, start up a business website, purchase or lease equipment and hiring employees during its inception.

You will have to open a bank account and apply for the grant in any bank of your choice. This opportunity will help you negotiate for other bank facilities that you may be interested in. The government will then authorize the banks to approve your loan depending on the eligibility criteria. With government’s involvement, the banks are increasingly financing many startups and small business enterprises. The funds given are limited at first, but this amount keeps increasing as the firm grows and employs more people.


Who is eligible for these grants?

While the government desires to finance as many businesses as possible, it is also committed to responsible funding. It is, therefore, necessary to ensure that you are eligible for these unsecured business loans. Below are the eligibility criteria for government grants:

  • You have to provide proof of the existence of your business by showing the registration of names and company’s incorporations.
  • You must be an Australian citizen and have a tax file name.
  • You must have the basic knowledge of running a business such as running a business website, market research and fulfilling the government’s requirements of starting your business.
  • You must be working in that business and not be in any form of employment.
  • You should not have any bank overdrafts, and if you have any, you will only apply for these grants once.

The beauty of government grant is that you don’t have to give up your business equity and it reduces over-reliance on family and friend for business loans. You will also have an established credit history such that you will easily get funds from other financial institutions. Many online lenders will rely on your credit history to help facilitate your loan request.

All businesses require funding at some point. To support growth and expansion, you will have to get the right lender with the best interest rates. Research and go for financiers who will support your business not only through funding but also with ideas that will help take your small businesses to another level. It is also important that when going for loans, you need to forecast your future financial needs, this prediction may not be 100% correct, but it will help you predict the financial demands so that you don’t work with a strict budget and fail to meet your financial obligations.


What Next?

Get in touch with us and let us help you find out if you qualify for a small business grand

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