The Business Competitiveness Program – run by Business Victoria – is now offering grants of up to $500,000 to Victorian SMEs (Small to Medium Enterprises) who are on a growth trajectory and need financial support to expand. The first round of applications is open until June 20th 2021, but your business must pass a number of requirements to be considered eligible.
The program will provide co-contribution grants of up to 33% of eligible project expenditure, allocated on a competitive basis. The minimum grant amount is $50,000, with a maximum of $500,000. Essentially, the Victorian Government is offering to spend $1 for every $2 you spend – so a $900,000 project may be eligible for a grant amount of $300,000.
According to the Business Victoria website, this program aims to “create jobs, increase industry competitiveness, and help strengthen local supply chains in traditional and emerging manufacturing sectors where Victoria has competitive advantages.”
This means that your business needs to be currently engaged in manufacturing or the manufacturing supply chain to be eligible for the grant. If not, it must demonstrate a genuine commercial connection to the manufacturing supply chain. On top of this, you must also:
- Hold a valid ABN
- Operate a business based in Victoria and conduct the majority of your manufacturing within the state.
- Employ at least 20 full-time equivalent (FTE) staff or have an annual turnover greater than $1.5 million.
- Preference will be given to businesses with less than 200 staff.
- Agree to meet any co-contribution requirements with eligible cash expenditure.
You can find the full list of eligibility requirements – including assessment criteria and guidelines for Trusts & Partnerships – in the Program Guidelines PDF.
Sound like you? Here’s what you could spend the money on.
Hopefully, some of you are reading this like ‘Yes! That’s my business!’ If so, congratulations – this is a huge (and rare) opportunity to expand your operations with direct government support. But what can this money be used for?
The grant says that it’s for the “purchase and commissioning of capital equipment (recorded as fixed assets in the applicant’s accounts) and associated project expenditure related to manufacturing product and process improvements, prototyping, evaluation and testing of new products and processes, and supply chain capability development. Everything else will be assessed on a case-by-case basis.”
To break that down, this means that the money can be used for things like:
- Manufacturing machinery, equipment, and technology. (Capital Expenditure).
- Product and process improvements – like prototyping, supply chain development, and testing of new products (Associated Project Expenditure).
- Minor building alterations and fit-out costs.
- Technology-specific training (External costs only).
- Hiring Labour and contractors (This doesn’t include internal salaries).
All eligible expenditures must also be incurred within 18 months of commencing the grant agreement, be a direct project cost, and be free of GST. Unfortunately, some of the things you won’t be able to spend it on are:
- Routine replacement or a minor upgrade of plant and equipment.
- Purchase of vehicles.
- Routine operational expenses.
- Costs related to preparing project reports, project variation requests, or the grant application.
- Projects where the primary purpose relates to offshore manufacturing.
- Building websites, marketing, sales and promotional activities.
- Early-stage Research and Development (R&D) activities.
If your business is eligible for these grants and you’re considering using it as part of your financing strategy, let us know. We can help you wrap your head around the finer points – like any tax or insurance implications – and work out how you can best take advantage of this exciting opportunity. We can even help you put together your application.
Disclaimer: This advice is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether this advice is suitable for you and your personal circumstances before acting on it.