So, you have been thinking about trying to get some government support for your business. Maybe you have been eying some capital equipment that is just outside your budget. Or maybe there is a project in the digital space that has been on your To-Do list for just a little bit too long and it is now starting to hang over your head. In these cases, and countless others, grants can help fill the gap and push your business to the next level. There are currently over 1,500 business grants across all industry sectors.
The problem is, there are over 1,500 business grants across all industry sectors. If you don’t know what you are looking for, it can be hard to know where to start. And even if you do know what you are looking for, there isn’t a lot of information about how it all works.
Well, it is time to fix that.
When is an application an application?
There are two main types of grant application: An Expression of Interest (EOI) and what you might call a Full Application. Many grants do not have an EOI stage and skip straight to the full application.
Traditionally, a grant EOI is self-explanatory, a short submission often no longer than two pages detailing the broad details of who the applicant is, why they wanted to apply for the grant and the benefits of the project. Those applicants whose EOI’s are successful would then be invited to submit a full application for the grant.
However, in recent years EOIs have become increasingly meaty. These days it is not uncommon to have an EOI that demands the same level of detail that you would expect to provide for a full application. Often, the ‘full application’ that follows a successful EOI is little more than providing additional documentation, such as company financial statements.
Points of consideration
There are a few things to consider before starting an application.
The first is project eligibility. Grant programs are designed with specific outcomes in mind. As such, they can be quite prescriptive about what they are willing to fund. This is what is known as ‘eligible expenditure’ and ‘eligible activities.’ The latter refers to what types of activity, such as equipment acquisition, are acceptable under the program and the former refers to what they are actually willing to pay for. Depending on the objectives of the grant, this could include anything from capital expenditure for manufacturing equipment to film production costs incurred in a particular state or territory.
Before writing an application, it is crucial to find out what is eligible for that specific grant. That way you won’t find yourself in a situation where you have spent blood, sweat and tears completing an application only to later find out your project was not even eligible in the first place.
And even when a project may seem to align perfectly with the program objectives, there are still idiosyncrasies that can throw a spanner in the works. Governments, both state and federal, often have priorities that are not necessarily explicitly stated in the guidelines but are nonetheless part of their assessment process.
For example, the Victorian state government has a longstanding emphasis on job creation across almost all its competitive grant programs, regardless of whether this is listed in the guidelines. Many Victorian grant agreements have the creation of a certain number of jobs written into the contract. In such cases, failure to achieve these job numbers can result in the government withholding grant funds or requiring reimbursement of funds already paid.
This leads us to the next thing to consider: Is your application going to be competitive?
There is a saying, ‘You can’t fit a square peg in a round hole.’ In this context, it amounts to this: if the project does not align well with the grant guidelines, it is not worth trying to force it.
These are competitive grants, and all applications are not only being assessed against the assessment criteria but also against each other. An application that is borderline in terms of alignment with the grant guidelines is almost certain to be unsuccessful. Determining the competitiveness of a project is a major hurdle, as pursuing an uncompetitive application is a waste of precious time and resources.
And speaking of resources, the final thing to consider is the financial commitments that are required of you, should you be successful. There are very few grants that will fund 100% of a project and those that do are almost always comparatively small.
If the grant is designed to ‘refund’ eligible costs already incurred, it will be a percentage of the total eligible costs up to a certain funding limit. If the grant targets future spending, it will almost always include what are known as ‘co-contribution’ or matched funding requirements. In essence, this is the financial commitment the grant program expects from you, and it’s often structured as a ratio. It may be 1:1 (i.e. dollar for dollar between the grant and the applicant), 1:2 (the applicant provides a minimum of $2 for every $1 provided by the grant) or even 2:1 ($2 from the grant for every $1 from the applicant).
Given that successful applicants are contractually obligated to meet whatever these requirements are, it is important to really consider what you, the applicant, are willing and able to commit to.
After submission – what happens after you apply?
Assessment periods vary considerably across institutions, governments, and the characteristics of particular grants. Generally speaking, it takes at least 6-8 weeks to complete the assessment period. Some grant programs take 3-4 months or more to decide on successful applications. During that time, the assessors may request clarification or further information. However, please don’t expect to receive regular updates.
Successful application and accountability
So. You applied, it was successful, and you have signed a grant agreement. Now what?
Well, for starters, the government will not just drop the full grant amount into your bank account and leave you to it. In fact, you may receive as little as 20% of the grant upfront. To receive the rest, the you will have to complete scheduled updates known as Milestones or Progress Reports. In other words, the government requires a periodic update on how the project is going before they release the next tranche of funding, though not all progress reports have money attached to them.
A generic payment breakdown for a large grant will see the applicant receive 20% upfront, 30% at the first milestone, 30% at the second and 20% at the end of the project. All these payments, apart from the first, will only be released once the government is satisfied with the documentation. This is designed to ensure that the project owner is accountable for completing the project proposed in line with the original application. Any expenditure that is not related to the project should be excluded.
At the end of the project period, you will be required to submit a final report on the project. All documentation associated with the project must be provided so that the government can determine that you have indeed completed the project. Depending on the size of the grant, you may also be required to submit a Post-Project Report up to a year after the project has been completed. This is so the government can assess whether the project has had the flow on effect that you probably said it would. Given reporting requirement can be quite extensive, it is important to maintain effective record-keeping from the get-go. That way, you won’t have to run around trying to find (or create) documentation months or even years after the fact to complete the end-of-project report.
Conclusion
As you may have gathered by this point, the grant application process can be time-consuming, migraine-inducing and requires compelling business case development and financial analysis to be successful.
Fortunately, professional help is available.
Avant Group is a leading consultancy firm featuring a team of specialised government grant, business advisory, and technical research consultants. We have over a decade of experience in the industry, with particular expertise in securing grants and funding for growth. Avant Group cuts through the red tape and manages the entire grant application process, from writing the application to guiding you through any auditing and reporting requirements – all so you can focus on running your business.
If you would like to know more about what we do and what grant opportunities might be available to your business, don’t hesitate to get in touch.