Small Business must pivot to navigate a tight economy and vanishing government grants.
Access to capital isn’t just important, its a crucial lifeline to surviving. Government grants support comes and goes, plus the ATO stepping up pressure on tax debts, small businesses are caught between tighter margins and fewer support options. For many business owners, the constant challenge is ‘how’ do your support your growth?
This article explores the recent changes affecting small business funding, outlines viable alternatives in the private market, and provides a comparable guide to balancing grants with strategic capital to grow.
If government funding dries up what’s your next move?
Small Business Funding Options
While grants are often tied to outcomes and reporting, alternative finance offers flexibility, speed, and strategic use cases. Australian Alternative lending market is set for huge growth, as more business owner turn to non-bank solutions.
Alternative lending adoption is expected to grow steadily over the forecast period, recording a CAGR of 17.4% during 2024-2028. The alternative lending market in Australia is set to increase from US$4.68 billion in 2023 to reach US$11.26 billion by 2028. (source ResearchAndMarkets.com)
In 2023 there were 2.5 million SMEs in Australia, with 406,000 new businesses launched.
In 2024 the top 3 growing sectors are Aged & Disability care, Cleaning & gardening maintenance and post Construction services.
In 2025 the high demand sectors were; Health Care / Aged Care, then all technology services such as cybersecurity, cloud computing & artificial intelligence.
Small businesses that are new or less than 3 years of trading, reflect a dynamic gap away from traditional banking requirements for approval. Government Grants and Private Capital are better positioned to offer small business funding options across all industries.
Access to funding is the most crucial factor, considering the survival rate of new businesses varies significantly between industries.According to (source:ABS Data cube as of 2024), 62.6% of agriculture, forestry and fishing businesses survived beyond three years of operating (among businesses started in the 2020/21 financial year). Compared with 38.8% of transport, postal and warehousing businesses survived over the same time frame. The overall survival rate across all industries was 50.1%.
Self employed (62.5%) 1–4 employees (26.0%) 5–19 employees (8.7%) 20–199 employees (2.6%) 200+ employees (0.2%)
Small businesses have faced challenges, with a decline in economic performance scores in May 2024, and a decrease in businesses recruiting new staff.
Small Business Grants Disappearing
In June 2025, the NSW Government confirmed the closure of the Business Connect Program, a long-standing support initiative that offered one-on-one advice and mentoring to SMEs. Its removal leaves thousands of businesses particularly regional operators and first-time founders with one less avenue for expert guidance and development funding.
NSW is not alone. Across Australia, several state-based initiatives are under review or quietly being scaled back. While federal programs like the Export Market Development Grant (EMDG) remain in place, they often come with stringent eligibility criteria and long reimbursement cycles.
In a climate of rising operating costs and global trade instability, timing is everything. A funding delay of three to six months can be the difference between survival and closure
Government Small Business Support Available
Despite the cuts, there are still valuable funding programs available, however companies should act fast and prepare thoroughly. Here’s a snapshot is available:
| Program | Provider | Purpose | Structure |
|---|---|---|---|
| EMDG (Export Market Development Grant) | Austrade | Reimburse up to 50% of export marketing spend | Matching grant, capped per tier, paid in arrears |
| Export Finance Australia (EFA) | Federal Gov’t | Working capital, supplier finance, overseas buyer finance | Loans and bonds for export-focused SMEs |
| VIC Business Growth Fund | Victorian Gov’t + Private Banks | Equity investment for SME expansion | Strategic minority stake |
| Ignite Ideas Fund (QLD) | QLD Gov’t | Support for innovative QLD-based businesses | Competitive grant – up to $200K |
| Regional Investment NSW | NSW Gov’t | Attract private investment into key industries | Project-based funding |
| NT Business Innovation Program | NT Gov’t | Supports early-stage business growth | Up to $30K, co-funded with mentoring |
ATO Crackdown and the Real Cost of Tax Debt
From 1 July 2025, General Interest Charges (GIC) imposed by the ATO are no longer tax-deductible. At 11.17% per annum (Q3 2025), this is higher than many forms of private finance and far less flexible.
The ATO is also taking a harder line on:
- Unpaid GST or PAYG
- Director penalty notices (DPNs)
- Garnishee orders and business wind-ups
- Public disclosures to credit reporting agencies
“For many SMEs, the cost of unpaid tax debt is now not just financial, it directly impacts access to future funding.”
Export Finance Australia & Austrade
If you’re planning to scale internationally or deal with overseas buyers, Export Finance Australia (EFA) offers small business funding options such as:
- Working capital loans up to $5M
- Bonds to support international contracts
- Supplier/buyer credit terms
- Government-backed flexibility
Meanwhile, Austrade supports small business funding with these services;
- Investment attraction into key sectors
- Export readiness and trade promotion
- Regional development funding
These programs are highly strategic, have a longer timeframe, and require financial backing or matching capital. Small business funding with short-term business loans, undecured working capital or trade finance can fill the cash flow gap.
Australia’s funding landscape is evolving and small business owners should be aware private capital available to them and know where to look and how to use it.
Accrutus Capital is committed to increasing awareness of small business funding options through their articles, non-bank funding partners, government grants and small business resources. Explore alternative capital solutions here from the private sector.
At Accrutus Capital, we help small business owners like you navigate both public and private funding, structure capital the smart way, and move fast when opportunity knocks.
Call us today at 07 3184 9183 and speak to our small business funding specialist.
Alternative Funding Solutions
- Don’t rely on grants alone. They are helpful but slow and increasingly limited.
- Assess your capital stack. Combine government support with private funding to balance risk and speed.
- Monitor ATO obligations. The cost of tax debt is now too high to ignore. Payout or finance the ATO.
- Be lender ready. Keep financials updated. Prepare your 3-way cash flow forecast. Understand what private funders, or government grants look for.
With Accrutus Capital, small business owners can access;
- Working capital facilities
- Equipment and asset finance
- Unsecured term loans and LOC
- Short-term bridging capital
- Trade and Invoice finance
These facilities are tailored to funding growth, smoothing cash flow, and taking advantage of opportunities as they arise.
DISCLAIMER
The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.
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