Vic government launches $1,200 grants to help SMEs go digital: Here’s what you need to know

The Victorian government has unveiled the details of its $20 million Small Business Digital Adaptation Program, offering rebates of up to $1,200 for SMEs looking to get a bit more tech-savvy.

Part of the state government’s $3 billion Business Resilience Package, released in response to the COVID-19 economic crisis, the new scheme is intended to help small businesses adapt to the online retail ecosystem.

Businesses will be able to access a $1,200 rebate for selected digital products, from suppliers that have partnered with the state government.

But it doesn’t look to be a particularly straightforward process.

Gavan Ord, a business policy advisor at CPA Australia, notes that Australian small businesses are “well behind their counterparts in Asia” when it comes to their digital capability.

That has meant missed opportunities during the COVID-19 crisis.

“The growth in online retail during the pandemic has not been evenly distributed,” Ord tells SmartCompany.

“Larger retailers have received the lion’s share, while smaller businesses lost out overall.”

And, this scheme has the potential to provide a boost for startups and small tech providers too.

Melbourne startup Mr Yum is already among the products available through the scheme, along with e-commerce platform Shopify.

But, businesses can still apply to be a part of the program, and Ord suggests it could provide a way to make inroads into the small business community.

“The Victorian program is limited to approved products,” he notes.

“In the initial stages, this space is likely to be occupied by well-known providers, but smaller tech companies can still get on board.

“Companies that believe their digital product is worthy of inclusion should act quickly to make a case to the government.”

Hoops to jump through

There are three steps to participating in the scheme.

First, small businesses must register for the program.

Once registered, they can trial digital products — such as website, e-commerce, finance and business management tools — for up to a month. Businesses can also apply for product workshops.

Business owners then purchase their preferred product, before applying for the $1,200 rebate.

The rebate is intended to cover 12 months’ access to the chosen product.

However, after purchasing and applying for the product, there’s no guarantee the rebate application will be successful.

Six weeks after their application, businesses will be contacted to confirm they have started to use the product, and that they have “begun to adapt their business to a digital operating environment”, the scheme guidelines say.

The rebate will be paid out within 10 working days of that confirmation.

Who’s eligible?

The rebate scheme is available to small businesses, micro businesses and sole traders, as long as they’re located in Victoria, had an ABN as of September 13, 2019, and were registered for GST as of September 13, 2020.

Not-for-profit businesses are eligible to apply, as are businesses that are not required to register for GST.

Applicants must also be able to prove they are currently operating and intend to adapt their business model to a digital operating environment.

What can I use the funding for?

The partner products that have been named so far are Mr Yum, Square, Shopify, Squarespace, MYOB and Xero.

Expressions of interest are also currently open for suppliers who would like their product to be available through the scheme.

A list of partner products is expected to become available on the Business Victoria website, and will be updated every two weeks until the end of 2020.

The funding is available to cover new products, or upgrades of existing products, as long as the latter includes additional capabilities related to digital adaptation.

The scheme can also be used for a product the business has used previously, if that was at least a year ago.

It does not cover renewals of existing licences or minor product updates.

Registrations for the Digital Adaptation Program will remain open until February 28, 2021, or until funds are exhausted.

You can find more information on the scheme here.