New funding support available to facilitate expansion for high-growth small to medium companies in New South Wales

This week the Baird government launched a new private sector initiative called Jobs for NSW backed by NSW government funding. Jobs for NSW is taking over two existing innovation grant programmes for start-ups from Innovate NSW and it has launched two new loan initiatives aimed at facilitating job and revenue growth for more established SME’s in New South Wales.

Funding opportunities are scaled according to the size and growth stage of NSW companies:-

  1. Minimum Viable Product (MVP) grants provide up to 50% in matched funding for approved project costs.  The range of industry sectors supported has been broadened and the funding cap has been raised from $15,000 to $25,000 to assist technology SMEs to engage with a potential business customer to demonstrate an idea, prove a concept, develop a prototype and receive feedback in order to customise and commercialise a B2B solution that addresses a high-growth opportunity.
  2. Building Partnership Program (BPP) Grants will replace the current Collaborative Solutions grants and now offers funding of up to 35% of approved project costs (to a maximum of $100,000), for consortia to develop an innovative solution that addresses a high growth opportunity or challenge.

The initial eligibility assessment for either program is as per the following link Preliminary Assessment Form

BPP Consortia must include at least three entities:-

  • Lead company – a technology SME with the ability to develop and commercialise the solution
  • Pilot organisation – a business customer in a key sector that is willing to test the solution
  • Partner company –  that will provide additional technology, research capabilities, or assistance to scale the solution

Jobs for NSW aims to develop a stronger ecosystem to allow more fast growth SMEs to get support and funding and to go for growth.  Two new initiatives – the Accelerated Growth loan and the Gazelle Loan Guarantee scheme provide new avenues of early-stage funding to support and encourage SMEs with a record of fast-growth with the win/win of increasing sustainable jobs in NSW.

A pilot of Accelerated Growth loans scheme will be open from mid-September.

  1. Accelerated Growth Loans are targeted at emerging fast growth SMEs with annual turnover of $500,000 to $3 million with a minimum of 5 employees.
  • Loans may be offered on an unsecured basis (depending on the risk profile of the applicant and the proposed use of loan proceeds).
  • Loan value $100,000 up to $300,000
  • Short term loan period of 6 months to 3 years
  • Concessional rates of interest
  • Negotiated repayments

Application requirements:-

  • Open to SMEs with 3 year record of 20% p.a. growth in revenue or staff levels
  • Applicants must demonstrate they can achieve a similar growth rate with support of the loan
  • Applicants must demonstrate they are unable to secure affordable finance from commercial lenders
  • Applicants must be registered for GST, non-tax exempt companies or must undertake to become incorporated if successful in accessing the loan

Loan requirements:-

  • 50% of funds to be used for staff costs – additional NSW hires.
  • Remainder of funds is for other growth costs
  • Quarterly financial reporting obligations  e.g. fund usage and cash flow reporting
  • Pre-nominated job creation milestones
  • Proposals which allocate a higher proportion of funds to additional employment will be ranked more highly
  • Loan repayments will include both principal and interest

      4. Gazelle Loan Guarantees are targeted at more established, expansion oriented SMEs (gazelles) with an annual turnover of $3m – $150m and more than 10 employees. This scheme may enable faster growth with access to higher value loans. The Gazelle Loan Guarantee scheme is live and programme guidelines are available will be at Jobs for NSW support for SMEs next week.

  • Jobs for NSW acts as guarantor for up to 50% loan value from a financial institution for an interest-based fee. This guarantee may enable negotiation of a lower interest rate on the base loan.
  • Loan amount supported will be based on credit worthiness of borrower; job creation and assessment of proposed project
  • Around 2-4 year term loan periods
  • Concessional interest rates based on risk profile

Application requirements:-

  • Applicant SMEs need a 3 year record of 20% p.a. growth in revenue and/or staff
  • Interest rate charged by Jobs for NSW based on specific loan request, use of funds, financial performance of the borrower including composition of cash flow; security of the loan amount; overall cost of capital to the borrower.
  • Applicants must be able to demonstrate they have been unable to secure affordable finance from commercial lenders
  • Applicants must be registered for GST and be non-tax exempt companies

Loan agreement requirements:-

  • Loan guarantee up to 50% of loan value capped at $5 million
  • Funds to be used for quality hire costs and other growth costs –  scaling, capital expansion, commercialising R&D, working capital management, production expansion, exports and national/international expansion
  • Quarterly financial reporting obligations including fund usage and cash flow reporting
  • Job creation milestones

Applications are reviewed on a case by case basis and criteria will be less stringent for companies based in regional NSW.

Gerry Frittmann 

Managing Director 

Mob: 0413 647 664

gerry@tcf.net.au

NSW Head Office

Tel: (02) 8219 4900

Email: info@tcf.net.au

PO Box 111, Rosebery NSW 1445

VIC Office

Tel: (03) 9629 7772

Email: info@tcf.net.au

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