If there’s one thing businesses like more than winning a new deal, it’s free money. Countless SMEs have been able to accelerate their growth plans, enter new markets and develop new products by accessing much-needed government grants and support programs.

But despite the hundreds of grants available for small businesses, many entrepreneurs are not even aware these sources of funding exist, and those that do know are often wary to apply.

But while the amount of paperwork needed for one application is high, grant experts say that’s the wrong approach.

“What we find is that businesses don’t have a strategy for finding grants,” GrantReady managing director Adrian Spencer says.

“Grants are actually an income stream, just like a capital raising or any other product, and businesses really have to use a strategic view for getting this funding.”

Spencer says the most common complaint he encounters is that applying for grants is just too difficult. However, he says that when businesses actually hear how much money they are eligible for, they quickly change their mind.

“Many businesses know there are government grants out there, and some even feel guilty they aren’t doing enough, but they don’t know how to go about it. They assume it’s too hard.”

“But when we tell these businesses how much money they can actually receive, they get interested. The perception is that the system is bureaucratic, but it’s not like that at all.”

Not only is it good to keep an eye out for grants that could help your business, it’s actually more necessary than you might think. Governments change nearly every year and budgets are often revised, so the grants on offer usually change from year to year and eligibility criteria are often updated as well.

Ivan Kaye, chief executive of BSI, says SMEs especially need to pay attention to what new grants are available.

“Government grants for SMEs are like mana from heaven. An SME burns through cash quickly, and where else are they going to find this type of money? If you don’t apply, you are missing out on some huge benefits for your company.”

To help small businesses know where to start, here are 10 of the best Federal Government grants and a few state grants to get started.

Federal

R&D Tax Credit

How much? Differs from case to case.

Who is eligible? Businesses undertaking legitimate research and development for product commercialisation.

First of all, it needs to be pointed out that the R&D tax credit is still up in the air. The legislation didn’t make it before Parliament in time, and innovation minister Kim Carr might even delay the legislation for another 12 months.

The proposed system will provide a 45% refundable tax credit for eligible entities with turnover of less than $20 million, and a non-refundable 40% tax credit for all other eligible entities.

R&D activities need to be ““experimental activities whose outcome cannot be known or determined in advance”, must use a “systematic progression of work that is based on principles of established science” and must be “conducted for the purpose of generating new knowledge”.

But with the legislation yet to make it before Canberra, businesses shouldn’t worry about applying for this just yet.

Commercialisation Australia

How much? Up to $250,000.

Who is eligible? Businesses with turnover less than $10 million per year for the three years before an application, although that changes to $20 million for some grants.

The Commercialisation Australia project is actually divided into four parts:

• Skills and Knowledge
• Experienced Executives
• Proof of Concept
• Early Stage Commercialisation

The Skills and Knowledge grants provide up to $50,000 to access specialist advice and services. Companies need to have turnover of under $10 million to apply for these grants.

The Experienced Executives program provides up to $200,000 over two years, up to $100,000 per year, to engage an experienced CEO or other executive to help develop the commercialisation of a product.

Proof of Concept grants provide between $50,000 and $250,000 to assist with the testing of commercial viability of the business model or idea for a product or service. Revenue needs to be under $10 million for these grants as well.

The Early Stage Commercialisation program provides repayable grants of between $250,000 and $2 million to develop a new product or service to a point where it can go to market. Revenue must be under $20 million.

Businesses need to be aware of the different funding requirements, especially for ESC grants which are repayable. After a company achieves $100,000 or more in accumulated sales, it must pay 5% of sales back to the government.

Additionally, companies need to provide they have a need for funding, the plan for commercialisation and potential for the product, specify a market opportunity, explain your management capability and describe how the product will improve Australia’s “participation and competitiveness in the global economy”.

Textile, Clothing and Footwear Small Business Program

How much? Minimum of $250,000.

Who is eligible? Businesses in the textile, clothing or footwear industries.

The Textile, Clothing and Footwear Strategic Capability program offers grants to businesses that boost innovative capability. Grants must be matched on a dollar for dollar basis.

As part of the 2010 budget, the Government introduced a further $5 million in funding, and lowered the eligible project funding point from $1 million to $500,000. This would include any government contribution.

Funds can be spent on products that foster innovation, market access, business improvement and “ethical practices”.

Export Market Development Grant

How much? 50% of expenses above $20,000 with a maximum of $150,000.

Who is eligible? Businesses incurring eligible export expenses above $10,000 over two years.

The EMDG is one of the most popular grants available to exporters, and for many businesses, the most necessary. Grants are actually provided for the previous year, so applications for 2009-10 are already being accepted.

Businesses need to have revenue below $50 million in the grant year, and must have promoted the export of goods, delivery of services outside Australia, inbound tourism or the export of intellectual property.

Businesses will need to submit an application form, and will need to identify that their export expenses were eligible. Eligible expenditures cover: overseas representatives, marketing consultants, marketing visits, communications, free samples, trade fairs and seminars, promotional literature, overseas buyers and registration costs.

Capability and Technology Demonstrator

How much? Up to $100,000.

Who is eligible? Small and medium businesses designing technology for the defence force.

The CTD program assists SMEs in demonstrating different technologies to the defence force that will provide “capability advantages”. It doesn’t work like a traditional grant system, but works as a program of collaborative development, where costs are shared between the two parties.

The costs can go towards seed funding for project proposals, project viability funding and concept definition funding. The government says the most successful proposals will be those using existing technology, but developed in different ways.

Enterprise Connect

How much? Up to $20,000.

Who is eligible? SMEs

The Enterprise Connect Innovation Centre program works be providing businesses with a comprehensive review, along with report of changes that should be implemented. Matching funding is provided of up to $20,000 for businesses to implement those changes, along with access to support from business advisors.

Business revenue limits apply according to location and industry. All businesses must be solvent, have filed BAS for the last three years and cannot have received equivalent business review services within the previous three calendar years.

Researchers in Business

How much? Up to $50,000.

Who is eligible? Any SME or research organisation.

The Researchers in Business grant is actually a part of the Enterprise Connect system. Researchers are provided for SMEs to help develop skills and technology, improve business, build and test prototypes or investigate new business models.

Eligible SMEs need to prove their project develops a new idea, involves activities that are not being carried out within the firm and is part of the business’s core strategy. The research should also require the researcher to spend a significant amount of time working on-site.

Techfast

How much? Up to $50,000.

Who is eligible? Any company creating new products with turnover between $1-100 million.

The TechFast program is designed to fund the development of new technology, along with assisting companies in getting advice from research organisations and distribution partners.

The funding is designed to identify new partners for companies so they can work together in bringing technology to market, assess the potential value of the project and help throughout the collaboration process with a partner. Funding must be matched by the business.

Best of all, the Government says there is actually not “strict assessment criteria”.

“Interested companies are encouraged to meet with TechFast to discuss their needs and the assistance they may receive,” it says.

Re-Tooling for Climate Change

How much? Up to $500,000.

Who is eligible? Manufacturers with turnover under $100 million.

This grant is designed so manufacturers can get help cutting their emissions and improving their production processes. Companies must have turnover under $100 million and be able to demonstrate they can actually fund the costs of the project not met by the grant, (which the Government categorises as at least 50%).

Eligible projects must be focused on improving energy and watse efficiency. Examples include water recycling, improving insulation, process re-engineering and investing in small-scale cogeneration plants.

National Rural and Remote Health Infrastructure Program

How much? Up to $500,000.

Who is eligible? Businesses providing services in certain rural and remote communities with populations under 20,000.

These grants are designed for businesses helping to provide access to health services in rural or remote communities. Grants are divided into three categories:

• $500,000 for capital works and refurbishment
• $250,00 for equipment
• $50,000 for strategic service planning for rural private hospitals

The funding is usually given to government organisations and private practitioners, but there are some opportunities for businesses providing health services.

State Grants:

Victoria

Small Technologies Industry Uptake Program

How much? Up to $250,000.

Who is eligible? Any business looking to introduce “small technologies” to solve problems, enhance products or increase competitiveness.

This scheme, which is set to begin next month, is open to any business wanting to incorporate new types of small, innovative technologies.

The system will work through vouchers. Vouchers can be exchanged for access to small technologies facilities, services, advice or expertise by service providers.

The Department of Innovation, Industry and Regional Development will offer three types of vouchers:

• A small technologies feasibility voucher for up to $10,000, which can be exchanged for fee-based services like testing and marketing studies.
• The small technologies technical voucher for up to $50,000, which can be exchanged for micro or nanotechnology based development activity.
• The small technologies technical trial voucher for up to $250,000, which can be exchanged for services facilitating the trial of existing small technology.

Smart SMEs Market Validation Program

How much? Up to $1.5 million.

Who is eligible? Any tax-exempt company with turnover less than $50 million for each of the three financial years prior to application, with fewer than 200 employees. Any applicant must also be willing to undertake 80% of R&D in Victoria.

The program is actually designed so that SMEs can help public sector entities using new technology. The Government has created a list of public sector technology needs – SMEs identify an appropriate need, and then apply for a grant to conduct a feasibility study.

After a feasibility study is finished, further funding of $1.5 million is available for R&D and Proof of Concept costs. However, the solution designed by the SME must be technology-based.

Collaborative Internet Innovation Fund

How much? Up to $500,000.

Who is eligible? Any business in Victoria. Projects must generate benefits in Victoria.

The Collaborative Internet Innovation Fund is designed to assist early adopters of new technology to create new projects and promote the use of that technology, particularly around internet-based projects. The “collaborative” nature of the project refers to web 2.0 techniques.

Funds must be matched by a ratio of 1:1, and can be spent on salary and costs for new staff, purchase or lease of new equipment, professional services, administration and project management or commercialisation of a new ICT product.

ACT

Innovation Connect

How much? Up to $50,000.

Who is eligible? Turnover of less than $1 million.

The innovation connect grants are actually split into two: the Proof of Technology grant and the Accelerating Innovation grant.

The Proof of Technology grant provides from $5,000 to $25,000, but up to $50,000 can be contributed in some circumstances, for prototypes that prove a concept, or for a technology plan that demonstrates whether a technology concept is commercially viable.

The Accelerating Innovation grant providers up to $10,000, and will only be granted on a dollar-for-dollar basis, based on reimbursement. The funds are designed to enable participation in commercialisation training, IP strategies and advice, market testing and mentoring.

Canberra Business Development Fund

How much? Differs from case to case.

Who is eligible? Any business geographically connected to the Canberra region.

The Canberra Business Development Fund is a joint venture between the ACT Government and the Australian Capital Ventures Limited, and is a fund to designed to provide businesses with capital funds through equity investment.

Businesses must have a proposal for an existing business that has reported sales, or has developed a prototype that is being trialled for commercialisation, while a business plan for expansion and growth is also required.

New South Wales

BioBusiness

How much? 50% of expenditure up to $100,000.

Who is eligible? Companies with turnover of less than $30 million, registered in NSW.

The grant assists projects that establish the commercial viability of biotechnology research concepts. Examples of biotechnology include animal trials, greenhouse testing and scale up to pilot plant. Eligible projects must take place in NSW, incur at least 80% of expenditure in NSW and be of 18 months duration, or less.

Companies applying for the grant must also be able to fund the remainder of project costs, and must have access to all intellectual property necessary to undertake the project.

The NSW Government defines biotech as a group of technologies designed to pursue the understanding or organisms and biological processes.

Green Business Program

How much? Differs from project to project.

Who is eligible? Any business conducting programs that increase the adoption of green-efficient technologies.

The NSW Government is pledging $30 million over five years to the Green Business Program. Grants will be provided to businesses in NSW that improve the efficiency of buildings, appliances and industrial processes, reduce electricity demand and promote the use of water recycling, among other activities.

Applicants must demonstrate why the project could not proceed without funding assistance. They must also show qualified and experienced personnel, sound planning, management and must have the necessary resources to complete the project.

Northern Territory

Territory Business Growth

How much? Up to $10,000.

Who is eligible? Most small businesses.

The Territory Business Growth program is designed to assist overall performance and profitability. An overview is provided by a qualified consultant, who assists in improving a business plan for ongoing improvements.

Regional Economic Development Fund

How much? Up to $25,000.

Who is eligible? Any business that can clearly demonstrate a program that will provide benefits to the wider community.

The purpose of the REDF is to assist businesses in any NT region, but specifically in rural areas. The Government says examples of areas where funding may be provided include regional transport systems, commercial activities with employment outcomes and specific economic development opportunities.

Applications must be made to the Department of Housing, Local Government and Regional Services. However, the Government states the total cost of a project cannot be funded, and the funds cannot pay wages and salaries.

Queensland

Business and Industry Transformation Incentive

How much? Between $30,000-$250,000.

Who is eligible? Business operating in “priority industries”: advanced manufacturing, alternative fuels, aviation, biotechnology, creative industries, environmental and mining technologies and services, information communication technology, marine, processed foods, therapeutic medicines and devices, tourism and wine.

The BITI is designed to help businesses in priority industries with projects that support innovation, increased productivity, exporting and building “regional strengths”.

Projects must operate within a priority industry, have an established operating base in Queensland, have been trading for at least two years and are able to provide funds equal to those given by the Government.

Western Australia

Low Emissions Energy Development Fund

How much? $250,000.

Who is eligible? Any business producing technology that will reduce emissions.

The LEED fund is designed to support the technological development of cutting greenhouse gas emissions, with an aim to have the state produce 20% renewable energy in 2020. Any business can apply, but each must match the funding by three times from another source – but these can also be government grants.

The Government is expected to announce it is accepting applications for the fourth round of funding over the next few months. Some of the projects already given funding include those developing wind, wave, tidal and solar technologies.

Innovator of the Year Award

How much? Up to $100,000.

Who is eligible? Any business in a “start-up” or “growth” phase

The WA Innovator of the Year Award provides winners with cash prizes of up to $100,000. The Mitsubishi Corporation WA Innovator of the Year category provides $50,000, and in-kind support of up to $50,000.

Businesses in the start up category and growth categories receive $25,000 in cash and in-kind support of up to $25,000. The in-kind support offers assistance in areas including marketing, IP, legal services and R&D.

Business Migrant Incentive Program

How much? Up to $1,500.

Who is eligible? The migrant in question must qualify for a state-sponsored business visa, and must demonstrate a written business proposal.

They must also demonstrate the financial capacity, and a genuine commitment, to engage in the proposed business or investment activity in a regional area of WA.

Entrepreneurs wanting to apply for funding must supply the Small Business Development Corporation with a quotation from a consultant, a completed applicant information sheet, a copy of the guidelines issued to that consultant and a current statement of the assets and liabilities of the migrant in question.

South Australia

WorkCover Return to Work Fund

How much? Up to $100,000, but projects above $100,000 will be funded in some circumstances.

Who is eligible? Any business designing an initiative used to return injured workers to work.

Expressions of interest will be judged against criteria including the project’s ability to find solutions to barriers stopping workers from returning to work, along with the project’s capacity to retrain injured workers.

Projects must also improve the skills of persons operating in the South Australian workers compensation scheme, and should also promote the implementation of a program to help industries with problems having workers return to work.

Tasmania

Workforce Participation Program

How much? Up to $7,000.

Who is eligible? Most businesses in Tasmania.

These grants are designed for businesses which help employees into the workforce by overcoming certain difficulties. This could even include workers who have been retrenched or have not worked in the previous three months.

Businesses need to have offered the particular employee work for a minimum of 20 hours per week for at least 26 weeks. However, there are some restrictions, including that businesses can’t lay off a person in order to hire another, and can’t provide the position to someone who has worked more than four hours per week for the previous three months.

Tasmanian Industry Support Scheme

How much? Up to $2 million.

Who is eligible? Businesses at risk of closure or significant downsizing, according to the Tasmanian Government.

The TISS is a loan scheme designed to help businesses that are close to falling over due to the current volatility of “financial markets and the consequent credit conditions”. The scheme was meant to end last year, but was extended until September 2010.

Loans ranging from $50,000 to $2 million can be given out, with interest rates determined by the Government. Applicants need to show that their existing credit facilities are restricted, and that the business is suffering a temporary downturn threatening employment level.

By Patrick Stafford

This article first appeared on SmartCompany.com.au, Australia’s premier site for business news, forums and blogs

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