Last week the Baird Government announced a raft of new measures to help deliver on the NSW Government’s election commitment to create 150,000 new jobs by March 2019.
‘Jobs for NSW’ is a private-sector led, Government backed initiative that aims to ‘tap the insights and knowledge of leading private sector minds to help drive government policy to grow the economy and create jobs.’
New funding initiatives for small to medium businesses in NSW include:
- Minimum Viable Product (MVP) Grants
- Building Partnerships (BP) Grants
- Accelerating Growth Loans
- Gazelle Loan Guarantees
- Regional Solutions Grants
A program of indirect assistance for Exporters is also under development as part of the initiative.
The following outlines what we know about each of the funding options, how to apply and what to expect.
1. Minimum Viable Product (MVP)
An expanded MVP grants program is aimed at start-ups yet to generate revenue to assist them in engaging with a potential business customer, or channel to market and to create innovative solutions that address compelling industry needs or market gaps.
Eligible start-ups can receive grants of up to 50% of approved project costs (to a maximum grant of $25,000).
The solution must:
- use an enabling technology, which is a new technology; or
- create a new use for an existing technology that enables new products, services or more efficient processes.
Start-ups must have an ABN registered in NSW, and be either a resident of a co-working space, incubator or accelerator, or a more established start-up business able to provide recent financial statements to Jobs for NSW.
While grants are available across all industry sectors, the start-up must be primarily focused on the development of technology, own the relevant intellectual property or the rights to commercialise the technology and have a relationship with a potential customer who can give feedback or a potential distributor willing to on-sell the technology.
Applications are now open. Businesses can complete a Preliminary Assessment Form online available here, and a Jobs for NSW Advisor will be in contact within 10 business days. Subject to a preliminary assessment, the Advisor will then invite Applicants who meet the criteria to proceed with a full application for an MVP grant.
2. Building Partnerships (BP) Grants
Replacing the previous Collaborative Solutions grants program, BP grants are aimed at helping start-ups and early-stage businesses already generating revenue to complete pilot projects in partnership with key customers and other entities (i.e. to accelerate market adoption of the business’ products or services). The program can also assist with funding for new marketing partnerships here in Australia (or overseas) to develop innovative new-to-market solutions. Solutions must use an enabling technology to address a compelling industry need or market gap.
Eligible businesses can receive up to 35% of approved project costs up to a maximum grant of of $100,000.
Similar to MVP grants, applicants for BP grants must have an ABN registered in NSW, and be either a resident of a co-working space, incubator or accelerator, or a more mature business able to provide recent financial statements to Jobs for NSW. The business must also be primarily focused on the development of technology (in any sector), own the relevant intellectual property or the rights to commercialise the technology and have a relationship with a potential customer who can give feedback or a potential distributor willing to on-sell the technology.
Critically, the BP grant application requires a 3 member consortia comprised of a lead organisation (the Applicant), a pilot organisation (usually a customer), and a third partner organisation (a more flexible role that can vary from another customer, a research organisation, a marketer/distributor, a manufacturer, or even a professional services firm in some limited circumstances).
Applications are open now and the first step is to complete the Preliminary Assessment Form here. As for MVP grants, a Jobs for NSW Advisor will contact the Applicant within 10 business days to make a preliminary assessment and recommend whether a full BP grant application should proceed.
3. Accelerating Growth Loans
In the six years to 2014, just six per cent of NSW’s companies – the fast growing small-to-medium enterprises (SMEs) – created over one million new jobs in NSW. These entities, known as ‘Gazelles’, are a key target for the Jobs for NSW initiative.
For smaller gazelle entities with turnover of between $500,000 and $3 million, a $3.5 million pilot program will offer concessional loans of between $100,000 and $300,000 for a term of between 6 and 36 months.
At least 50% of the loan funds must be used to hire additional staff in NSW, with the remainder available for other expenses to fund business growth. Repayment of the loans will include both principal and interest, with specific terms confirmed on a case by case basis.
In addition to demonstrating they have been unable to secure affordable finance from commercial lenders, applicants must also:
- employ at least 5 people
- demonstrate an average 20% growth rate over the last three years and plan to continue this rate of growth with the support of the loan
- be a non-tax exempt company registered for GST or undertake to become incorporated if successful in accessing the loan.
Applications are expected to open mid-September. Please get in touch with your BSI consultant today if you meet the criteria and are interested in seeking a loan under this program.
4. Gazelle Loan Guarantees
For larger ‘Gazelles’ with strong cash flow and turnover between $3 million and $150 million, Jobs for NSW will partner with both the applicant and select financial institutions to enable them to extend loans in circumstances where the company would not otherwise qualify for credit on a reasonable stand-alone basis.
The measure provides loan guarantees of up to $5m (depending on the proposal) for up to 50% of the amount lent by selected financial institutions. The guarantees will typically have a term of 2 to 4 years and a concessional interest rate relative to the market.
While the emphasis is on job creation, funding may be used to scale operations through working capital, payroll, commercialised R&D, expansion of production capacity and exports. If located within NSW, the establishment of national and international headquarters may also be supported under this measure.
Repayment arrangements will be negotiated taking into account the proposed transaction, the financial stability of the gazelle and the purpose of the loan/guarantee
Applications are opening soon, but please speak with your BSI consultant today if you would like to explore a loan guarantee for your business.
5. Regional Solutions Grant
The NSW Government has committed 30% of the total $190 million Jobs for NSW for investment under the Regional Jobs Now portfolio.
In addition to regional businesses being able to access all elements of the Jobs for NSW program, a new Regional Solutions Grant is also under development for start-ups and SMEs in regional and rural NSW.
Specific details of this program are limited at this stage, however preliminary information available on the Jobs for NSW website (http://ift.tt/2cpY83y) suggests a focus on both SMEs and start-up accelerator and incubator businesses that commit to creating 10 or more jobs, or a lesser number where a significant regional impact can be demonstrated. Applicants must also:
- have an ABN number, with a registered office/principal place of business located in Australia
- be operating for a profit
- have been operating for a minimum 1 year
- be solvent and not be under criminal investigation
- not have a history of bankruptcy or adverse findings against them (including company directors)
- demonstrate they are up-to-date with payroll tax, superannuation contributions and other ATO requirements
- be prepared to declare all existing loans, debts and securities.
The program is expected to open in mid-October 2016.
Assistance for Exporters
A final element of Jobs for NSW is a program of indirect assistance for exporters in the form of networking, mentoring and export promotion events. While references on the Jobs for NSW website, specific details of how this assistance will be provided to NSW exporters still under development.
Jobs for NSW represents a suite of positive initiatives for growing NSW businesses that complement other Federal government incentives and grants. For more information on any of the Jobs for NSW measures, or how best to access various government funding products, call a BSI Innovation consultant on (02) 9126 9100, or visit http://ift.tt/2cpY83y.
Also, watch out for an upcoming Jobs for NSW event to be held in our Sydney offices.