In 2019, 45% of large businesses requested additional finance in order to expand their Australian companies into international waters. These are companies with annual revenue of over $5 million. This reveals that it doesn’t matter how successful or skilled you might be at your trade, sometimes we all need a little extra support.

So the Australian government has stepped in. Managed by Austrade, the Export Market Development Grant (EMDG) opportunity exists to help Australian businesses grow their exports in overseas markets and promote international business partnerships. If you’re looking to scale into the Asian or European markets (or further afield), it could be worth checking your eligibility for the EMDG and how to apply.

Who is eligible for Export Market Development Grant?

The EMDG is open to Australian businesses that are making a strategic shift towards international markets. In order to grow their exports, the EMDG is open to companies turning over up to $20 million per financial year. As part of the application process, company directors must be in good standings with the government; including no outstanding debts.

Eligible applicants must be “export ready”, in that they own the intellectual property or ideas that will be manufactured. Acceptance into the grant scheme also means that businesses must promote either the exports of goods, services, or inbound tourism. Specific events and conferences may also qualify as an eligible business for the EMDG.

The other feature to note is that since this grant reimburses your expenses, you’ll be required to claim back the value of each expense in the year following the grant year.

Confusing, right?

So while you may be eligible and approved on the EMDG scheme; the cash won’t return to your bank account until after it has been spent by your business. Luckily, the entire idea of this grant is to plug any developmental finance gaps and grow your annual revenue without experiencing the delays of year-round sales. In the mean time, a good option is to access funding against your approved grant to help tackle the grant-eligible expenditure and milestone completions before your business receives the EMDG cash.


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Which expenses can be claimed?

This is where things get interesting. There are eight different expense categories, but you may not be approved to claim expenses for each of them. Note that none of these are the usual G&A expenses that you can claim back during tax season; they all relate to export. To ensure you will be reimbursed, you must apply and be approved for each category.

The following are all examples of possible expenses to claim:

  1. Intellectual Property
  2. Overseas Representative
  3. Overseas Buyers
  4. Marketing Consultant
  5. Marketing Visits
  6. Promotion
  7. Trade Fairs
  8. Free Samples

Intellectual Property

These are the expenses associated with the ownership and protection of unique intellectual property (IP), such as insurance or the legal fees that are wrapped up with trademark costs. Expenses relating to the purchase cycle may also be valid if they relate to intellectual property, although this is a nuanced take that will require further approval.

Overseas Representative

This applies when there are costs associated with sending and placing an employee or consultant (any representative bodies) in the country where you attempt to penetrate the market. Expenses may include salaries or field visits, for example.

Overseas Buyers

Overseas buyer costs include purchases in export markets for manufacturing products and the connected flights, accommodation and living costs

Marketing Consultant

In order to expand operations internationally, you may take on a consultant with specific experience in the foreign market in question. Expenses related to these costs, such as PR and digital campaigns may be expensed under the EMDG scheme.

Marketing Visits

Similar to overseas buyer expenses, you may be able to claim back the funding spent on flights, food, and daily costs when traveling for marketing reasons.

Promotion

Grant monies may be spent on digital promotion efforts such as Facebook and Google ads, social media sponsorship, or brand partnerships.

Trade Fairs

Trade investment can be a major source of income for some businesses, so the costs associated with international trade fairs may be expensed on the EMDG scheme.

Free samples

Expenses incurred through free samples are also considered part of the export journey, with stock used for lead generation purposes considered an ‘eligible promotional expense’.


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How to apply for Export Market Development Grants (EMDG)

It’s important to familiarise yourself with the reimbursement scheme in order to become export-ready and expand your business internationally.

The EMDG application process has undergone a number of changes. As of 1 July 2021, the EMDG program was updated from its current reimbursement model to an upfront grant model. Feel free to get in touch with us to understand what this reform means for your business.

The primary function of these changes is to provide increased security around the scale of funding your company is eligible to receive over the 2 or 3 years following grant approval. So do make a note of these changes before applying for the EMDG scheme using the process outlined below.

 

Business Tiers

Firstly, determine which tier your business fits into.

Tier 1

This tier is known as ‘ready to export’, and is open to first-time exporters, who can claim up to $40,000 each year across a two-year period.

Tier 2

This tier refers to businesses that are already exporting and scaling up. By expanding their exporting and promotional activities, these companies are eligible for up to $80,000 per financial year for 3 years.

Tier 3

Finally, this tier applies to companies that are well-versed in exporting but want to undergo a strategic shift. For example, you may want to try targeting a new market. These businesses may be granted up to $150,000 per financial year for eligible expenses over 3 years.


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Application Process

The EMDG program begins with an assessment to analyse whether your business qualifies.

Next, you’ll undergo a workshop to understand more about export promotion, the grant program, and how your business fits in.

You’ll then get the chance to submit and upload claims, before being subject to an audit after around 6 weeks. Keeping records is super important as they act as evidence for the business and promotional expenses you may have incurred. They help your company hold up against checks and investigations. Contracts with consultants or representatives are also useful.

Finally, assuming there are no issues or delays connected with your case, you’ll be able to begin receiving the benefit.

The EMDG can be a great choice for Australian companies who want to build on their brand and expand into global waters. If your business has already been approved for an EMDG grant and/or awaiting EMDG payment, or you are looking to apply, access the non-dilutive Grant Advance funding solution to leverage this scheme and your growth. Get in touch with us to learn more today.


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Suneha Dutta

Suneha is digital marketing expert, helping innovative companies learn more about Fundsquire's seamless, timely, and innovative funding solutions. She brings diverse experience in creating compelling narratives and content across industries and markets.