New manufacturing grant open for SMEs
19 September 2019 | Minutes to read: 3

New manufacturing grant open for SMEs

By Dr. Rita Choueiri

Are you a small or medium manufacturing company looking to invest in capital equipment and new technologies that will allow you to develop new products or diversify into new markets? If so, you’re in luck – the Federal Government has just opened the doors to a new manufacturing grant for Australian SMEs to support just that.

The new Manufacturing Modernisation Fund will contribute $50 million in co-funding over three years to support transformative investments in technologies and processes as part of the government’s pledge to help manufacturing businesses innovate, develop global competitive advantage and create new jobs. Minister for Industry, Science and Technology Karen Andrews says the fund will also “support businesses to upskill workers to maximise the benefits of technology” and is a “key part of the Government’s economic plan to create 1.25 million new jobs over the next five years”.

Available funding

The $50 million funding pool will be accessible via two streams:

  • $20 million for grants of between $50,000 and $100,000 for small-scale technology and efficiency improvements
  • $30 million for larger grants between $100,000 and $1 million for transformative investments in technologies and processes.

The smaller grants must be matched with a cash contribution by the recipient, whereas the larger grants will be provided on a 3-to-1 funding basis, meaning 75% of eligible project costs must be covered by the recipient.

Funding from other Commonwealth, State, Territory or local government grants cannot be used to fund the manufacturer’s share of eligible project costs, so demonstrating your business’ capability (in terms of financial and personnel resources) to undertake an eligible project, with or without grant funding, is key to putting your best foot forward.

It is also important to note that whilst businesses can apply for each of the funding streams, only one application (if successful) can receive grant funding.

Eligibility criteria

There are a few basic eligibility requirements that your business will need to meet before a grant application can even be submitted for consideration:

  1. You must be an entity incorporated in Australia and classified as a trading corporation, which means that your trading activities must form a sufficiently significant proportion of your overall business activities and are not merely peripheral activities.
  2. You must be a small or medium sized manufacturing business, which means that your employee headcount (not full time equivalent) must not exceed 199 employees.
  3. Your project must involve capital investment and associated skill-based training to modernise your manufacturing processes, such as buying, constructing, installing or commissioning a manufacturing plant, equipment or software and relevant training and skills development to assist in integrating this technology into your business.
  4. You must be able to demonstrate the level of job creation expected from your project and that you have the support (from the company board or equivalent) and financial resources necessary to fund the portion of project costs not covered by the grant funding and successfully complete the project.

Assessment criteria

Like most other grants on offer, the Manufacturing Modernisation Fund is a competitive grant which means that you are competing against all other applicants for a share of the funding pool. Each application is therefore assessed on merit, based on how well it meets the criteria, how it compares to other applications, and whether it provides value for money for the Government.

To give your business the best chance of securing your nominated grant funding amount, it is essential that you first score highly against the merit criteria, which is weighted based on importance as follows:

  1. The extent that your project will improve your manufacturing competitiveness and lead to job growth (40 points)
  2. Capacity, capability and resources to deliver the project (40 points)
  3. Impact of the grant funding on your project (20 points).

Note that the amount of detail and supporting evidence that should be provided in your application should be commensurate with the project size and complexity, as well as the amount of grant funding you are applying for. Supporting evidence must also be provided to demonstrate how your project fares against the criteria – this is where companies usually fall short of putting their strongest case forward, even if the detail in their application describes the project well.

How William Buck can help

If you are keen to explore this grant opportunity further, please contact our specialist R&D Incentives team. We can undertake a pre-qualifying exercise to help you assess whether your company could be eligible for the grant and, if you are, to scope, prepare and submit a viable application with strong supporting evidence before the round 1 deadline of 31 October 2019.

New manufacturing grant open for SMEs

Dr. Rita Choueiri

Dr. Rita Choueiri is a scientist and the head of the Melbourne R&D Incentives division. She is a keen promoter of innovation and is a highly regarded R&D specialist helping companies to identify R&D opportunities, determine project eligibility and set up the systems and processes to maximise tax offsets and minimise exposure.

Related Insights