The Export Market Development Grant is a key financial assistance program designed to help businesses market and promote their goods and services internationally. Berrin Daricili of William Buck explains what has changed with the program.
The Export Market Development Grant (EMDG ) provides funding to assist over 4,000 small and medium enterprises (SMEs) per year cover export-related costs such as producing promotional material, travelling overseas, and providing free samples.
What’s changed?
Traditionally, the EMDG program operated under a reimbursement model, where eligible applicants were able to claim eligible expenses incurred during a particular financial year once that financial year had ended. Whilst the program still operates this way for any eligible export marketing expenses incurred up to 30 June 2021, significant changes came into effect on 1 July 2021 that changed the EMDG program from a reimbursement scheme (where an application is made in retrospect) to a traditional grant program. Importantly, applicants can now apply for the grant (for eligible export-related expenditure for each year over the next 2 or 3 years) and receive confirmation of funding before those expenses are incurred.
These changes are designed to:
- Be more responsive to the needs of different types of exporting businesses, with different grant funding ‘tiers’ available based on an applicant’s export-maturity.
- Simplify the application process, allowing applicants to apply only once for a grant that will span 2 or 3 years (depending on funding tier).
- Provide applicants with more certainty regarding funding amounts they are entitled to before they incur export-related expenditure. Grant agreements will span two ort three years and will now specify the amount of funding that will be provided to a successful applicant for each of those years.
It is also important to note that the EMDG program remains ‘entitlement-based’ rather than competitive, which means all applicants that meet eligibility criteria will receive grant funding. No comparison between applicants will be made. However not all applicants will necessarily receive the amount of funding they request as the total funding pool must be distributed among all eligible applicants.
The grant also remains capped at 8 years – once an applicant has reached 8 years of grant funding (not necessarily consecutively), they will no longer be eligible to apply for the program.
Funding for exporters
EMDG grants are available at three varying levels of support, called ‘tiers’. The funding amounts and lengths of these grant tiers reflect the different stages of an exporter’s journey:
Tier 1 – Ready to export: Tier 1 grants support first-time exporters with funding of up to $40,000 per financial year for two years.
Tier 2 – Expanding: Tier 2 grants support those expanding their export promotion activities (i.e. they must already be exporting) with funding of up to $80,000 per financial year for three years.
Tier 3 – Expanding and strategic shift: Tier 3 grants support those expanding their export promotion activities and making a strategic shift (e.g. targeting a new market or new type of customer) with funding of up to $150,000 per financial year for three years.
Applicants can apply for any tier level that suits their organisation, and do not need to progress through each tier consecutively.
Funding for representative bodies
There are also grants for industry bodies and alliances to help their members to become export ready and export successfully, such as providing training to members who are new to export. These representative bodies will be able to access up to $150,000 per financial year across three years to provide this training and undertake promotional activities on behalf of their members.
Eligibility criteria
Applicants must be:
- An Australian entity (e.g. sole trader, trust, partnership, company), hold an ABN, and have a turnover of less than $20m for the financial year previous to the claim year.
- Exporting or ready to export eligible goods, services, events, IP or know-how, and/or software that is of substantially Australian origin.
- Intending to incur eligible expenditure on activities undertaken for the purpose of marketing eligible products overseas (excluding NZ). All expenses must relate to promotional activities to market in foreign countries, or training activities to develop skills in such marketing.
- Able to match, at a minimum, the dollar value of the grant funding amount they receive (i.e. at least 50% of the total eligible expenses they plan to incur).
Application process
EMDG applications must be submitted online, along with supporting documents that prove an applicant’s eligibility and describe its export marketing intentions. The specific attachments that will need to be collated and submitted along with an applicant’s EMDG application vary depending on:
- The grant funding tier being applied for.
- Whether the applicant is exporting a ‘good’ or a ‘service’.
- Whether the applicant is an SME exporter or a representative body.
Applicants will also need to submit their 2020-21 Balance Sheet and Profit and Loss Statement as evidence that their turnover is less than $20m.
Once grant applications are assessed, eligible applicants will receive a grant agreement outlining the amount of funding they will receive and the length of the grant agreement. Grant funding is then provided via milestone payments (payments will be made within 14 days of submitting a milestone report), rather than in a lump sum.
EMDG applications for expenses incurred from 1 July 2021 are currently open and close at 5pm on Tuesday, 30 November 2021.
Contact William Buck for assistance with determining your business’ eligibility and preparing a successful grant application.
Berrin Daricili, Manager, R&D Grants & Incentives
T: 03 8823 6846
E: Berrin.darcili@williambuck.com
Dr Rita Choueiri, Director
T: 03 8823 6846