In October of this year, the Morrison Government released the belated 2020-21 Australian Federal Budget. As part of the Second Women’s Economic Security Package, the Boosting Female Founders Initiative (BFFI) was released. This new program provides female-founded businesses with the opportunity to benefit from grant support packages for improved domestic and international growth. Here’s a rundown on how it works and how it will aim to encourage Australian female entrepreneurs.
Eligible Applicants
“Female-founded” businesses are eligible, so what does that mean?
- The business must be owned 50% by women
- The C-suite (founding team) must comprise of 50% women
Businesses must also:
- Have an Australian Business Number (ABN)
- Be registered for the Goods and Services Tax (GST)
- Be one of the following entities:
- An entity incorporated in Australia
- An incorporated trustee on behalf of a trust
- An Aboriginal and Torres Strait Islander Corporation registered under the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth)
- A partnership
- A sole trader
Who is not eligible?
Businesses who are:
- A trust
- Income tax exempt
- An unincorporated association
- A Commonwealth, State, Territory or local government body
- Any organisation not included in section 4.1 of the grant opportunity guidelines
Eligible Funding
Successful applicants could receive between $25,000 – $480,000, varying due to their circumstances.
Granted on a co-contribution basis:
Limitations
The grant can only fund up to 50% of project costs.
BFFI does make exceptions however, if applicants can fulfil additional criteria, whereby the proportion may increase to 60% or 70%.
Duration
In October, the government announced it would extend the program over 5 years, longer than the initial 3 year duration. They also pledged an additional $35.9 million, increased from the initial budget of $18 million per year.
For information on how the 2020 Federal Budget affects businesses more generally, read this article.
Application Process
Stage 1: Expression of Interest
In their EOI, applicants provided information about their entity, answered questions relevant to their eligibility and also provided personal and project details. More specifically, they provided data such as their project budget, in order to determine how much grant funding the applicant could receive.
They also responded to assessment criteria, in consideration of factors such as the problem the startup solves, the key customer base, the revenue model and current funding barriers.
Stage 2: Assessment Criteria
Applicants who succeeded in the first stage completed a second form. In this, they explained in greater depth why their business should be selected. The three key criteria were:
- How the project aligned with the program’s objectives and outcomes
- The applicant’s capacity, capability and resources for project delivery
- The impact of grant funding.
Criticism
Strict Eligibility Requirements
Some female business owners were excluded from the program because of the strict nature of the criteria. For example, if the business handed over any amount of equity or raised any amount of capital through a male investor or, the business may be ineligible.
Lack of Targeted Support
It has been argued that the program could do better by providing more tangible benefits for female entrepreneurs. For example, females in the industry desire a greater focus on childcare support. As a consequence of women becoming disproportionately unemployed due to COVID-19, many have transitioned to leading their own businesses while providing for dependent children.
Timing
The government announced the grant one month prior to the Stage 1 closing date. Applicants were required to have already secured 50% of their total project budget, the short timeframe then posing an obstacle for many.
What’s next?
Round 1 closed in April 2020. Official opening dates for Round 2 have yet to be announced.
Click here for more details from the government about the initiative.
Conclusion
The Boosting Female Founders Initiative presents a valuable opportunity for female-led businesses to seek funding to support domestic and global growth and success. Because it is a highly competitive program, the government requires a thorough application process including expression of interest and assessment criteria rounds. Though garnering some criticism, the initiative is a step in the right direction for visibility and support for female entrepreneurs. But is it enough? Time will tell.
Are you a small business who missed out on Round 1 of BFFI? Check out this article to see what other government grants the startup may be eligible for. This article also acts as a helpful guide for the grant application process.
