Government Loans & Funding
Government loans differ from government grants because government loans are required to be paid back with an interest rate.
Government loans allow businesses to access finance when traditional sources have not been able to be secured and loans are government guaranteed.
Below are the key sources of government finance your business should know about:
Export Finance Australia
Export Finance Australia provides finance for Australian businesses looking to export their product or services. Its loans are designed to be used for export activity when traditional sources of finance i.e. banks have not been able to be secured.
There are two main loans Export Finance Australia provides:
Export Transaction Loans
Value: From $100,000
Loan term: 24 months
To apply for this loan businesses must have been established for at least two years, with a minimum revenue of $250,000 in the previous financial year*.
Finance must be used to fund:
- export-related transaction(s) for the export of Australian goods and/or services from Australia
- the expansion of your business in an overseas market
- equipment and other costs associated with delivering future export or export-related contracts
Interest rate for this loan vary from 7-10% p.a. Further information about this loan can be found here.
*Further eligibility criteria applies. See the Export Finance Australia website for more details.
Small Business Export Loan
Provides finance support for export transactions, which other traditional forms of finance i.e. banks are unable to provide. To be eligible businesses must turnover between $250,000-$10 million and have been trading for at least two years.
The loan must be used to fund:
- the export of Australian goods and/or services from Australia
- international tourism growth
- online sales to international customers
Loans are unsecured and interest rates are approximately 12% p.a.
Further eligibility criteria applies, see the website for further information.
CEFC – Clean Energy Finance Corp
CEFC provides finance to businesses that are investing in Australian-based renewable energy, energy efficiency and low emissions technologies, as well as innovative start-up companies through its Clean Energy Innovation Fund.
CEFC aims to increase the flow of finance into the clean energy sector and can work with direct individuals or third parties on co-financing options.
Financial terms including financial product type, interest rate and payback periods are tailored to each individual project and are determined on a case-by-case basis.
CEFC prefers to work with renewable projects with a minimum investment size of $20 million and have a limited capacity to fund small projects.
In order to apply for finance, businesses must submit an application about their project to CEFC with the following details (please note this list is not inclusive or exhaustive)
- Project and technology type
- Risk (technical, financial, delivery and implementation, and credit)
- Life of the project
- Anticipated energy and carbon savings
- Amount of finance being requested from the CEFC
- Amount of finance sourced from parties external to the CEFC.
CEFC are not able to fund the following:
- A technology for carbon capture and storage (within the meaning of the National Greenhouse and Energy Reporting Act 2007)
- Nuclear technology
- Nuclear power
ARENA – Australian Renewable Energy Agency
ARENA offers several finance opportunities throughout the year for the renewable energy sector.
What is available changes each financial year, so it’s best to keep an eye out on the website’s funding page for any new funding opportunities.
ARENA aims to invest in projects that will help Australia shift to affordable and reliable renewable energy, with three key priority areas when choosing projects to invest in:
Priority 1: Integrating renewables into the electricity system
Priority 2: Accelerating hydrogen
Priority 3: Supporting industry to reduce emissions
To see current opportunities visit the ARENA website
Jobs for NSW
The Jobs for NSW program offers two key finance opportunities for NSW-based businesses:
Value: Up to 50% of the amount lent by a financial institution, up to a maximum of $5 million
Repayment terms: Typically 2-5 years
Loan guarantees provide financial support to SMEs creating jobs in NSW to access capital in partnership with financial institutions.
include expanding operations through:
– Working capital
– Scaling of commercialised research and development
– Expanding production capacity
– Exports and establishing national and international headquarters (if the business headquarters and jobs are created within NSW)
To be eligible for funding, businesses must:
- Have a minimum of five employees (full-time, part-time or
- Be creating a minimum of 30 additional FTE jobs within three years in NSW.
- Be able to demonstrate revenue of at least $3 million
- Have an inability to access sufficient funds from the lender to enable the business expansion
Further eligibility criteria applies, see the Jobs for NSW website for more information.
Accelerating Growth Loans (AGL)
Repayment terms: Up to three years, with a fixed interest rate of 9.2%
Accelerating Growth Loans are direct loans for fast-growth SMEs who cannot obtain finance from traditional lenders.
AGL loans can be used to accelerate growth and employment. Funding cannot be used to refinance other loans.
To be eligible for funding, businesses must:
- Have a minimum of five employees (full-time, part-time or casual).
- Be creating a minimum of 10 additional Full-Time Equivalent (FTE) jobs within two years in metropolitan Sydney, Newcastle and Wollongong
- Been trading for a minimum of one year
- Demonstrate that they have been unable to obtain commercial finance
Further eligibility criteria applies. Visit the Jobs for NSW Accelerating Growth Loans for further information.