Setting up a new business in Australia is not a cakewalk, though help is around the corner at all times. One such scheme that a lot of startups can make use of is a small business grant. But the question here is, what exactly is a business grant?
What is Small business grant?
The government of Australia supports a lot of promising startups with small business lending that can be used as an investment. The government body sanctions hundreds of such grants every year, all of them being worth billions of dollars accumulative.
There are government grants available as small business lending for various purposes, like:
● Import & export
● Research & development
● Commercialising products
Besides just these, the government also allows low-fee or free advisory services, tax advice and other supports. Many such schemes are provided in the form of cheap business loans in Australia for coaching, mentoring and networking.
Different types of business grants in Australia
The Australian government offers a whole lot of business grants. However, a majority of these grants are offered by the state government, though the federal government offers grants too. Some of the most popular small business grants in Australia are:
1. Australian Government Restart Incentive
2. R & D Tax Incentive
3. Certain Inputs to Manufacture (CIM)
4. CSIRO Kick Start Grant
5. Australian Government Entrepreneurs Program
6. State Government Grants (for various states)
Are there alternatives to Government-sponsored business grants?
Small business grants from the government form a very small part of business lendings. A bigger part is taken care of by traditional lenders (like banks, etc) and other small financial institutes (like Hubbe itself).
These small business funding are of different types too, especially based on what they would be used for. Some of the most popular forms of small business loans in Australia from traditional and non-traditional lenders are:
- Unsecured business loans: Unsecured loans are easily available for new businesses and startups, that too without needing collateral. Hence, it is meant for all the small scale businesses that do not have any proper assets to be provided as security.
- Invoice financing: Invoice financing is a perfect way to add a working capital boost. It helps businesses fund their invoices and as and when required and payback on a stipulated time.
- Equipment Finance: Equipment funding lets businesses invest in machinery and other process-related equipment. The loans pay off the price of the equipment and the business has to pay back in monthly installments.
- Line of credit: Line of credit works a lot like credit cards, albeit for the business. There is an approved loan amount sanctioned in the name of the business. This can be withdrawn or used to make purchases as and when required.
Why should you consider small business lending over business grants?
The eligibility criteria for small business grants in Australia is pretty tough. Some for the basic eligibility setup are:
● Have fewer than 20 employees
● Should have an appropriate legal structure
● Should be registered with Australian Business Number
● Should be able to propose how employment opportunities could be increased
On the other hand, the eligibility for acquiring small business loans is lenient. The basic checks that lenders make are done to ascertain whether the business would be able to repay the loan back or not. Some of the requisites are:
● Last 6 months of bank statement
● Proper business plan
● Should be registered in Australia
The usability is another major aspect that differentiates business grant from a small business lending. Small business grants are offered for specified purposes and the same has to be adhered to. However, since small business loans are so diverse, you can use the funding for any purpose you deem fit, be it as capital investment, working capital or other financing needs.
So, when it comes to getting loans or funding for your small or medium-sized business, business loans are the best options, especially if they are from alternative lenders, like Hubbe.
Also Read: 5 trends in small business lending that we are excited about in 2020
Also Read: How to choose the right Business Loan for your Small Business