Financing a circular business project
Explore the funding options available
If you’re ready to start financing your circular business project, here’s some resources and tools to support you to become finance ready and gain an understanding of the options that are available for financial support.
Finding the right finance for your circular business or project
Finding the right type of funding or finance for a circular economy focused business or project is in many ways no different to any other type of finance.
Funding is commonly available from government, philanthropy, and private sectors. It can come in the form of incentives, grants and programs, research and development incentives, equity, debt, and alternative forms such as crowdfunding.
The following resources can be a useful guide in helping you to identify and learn more about the different types of funding available and its suitability to your purpose at different stages:
- Business.gov.au is a great guide that can help you choose your funding
- The Circular City Funding Guide is an EU focused resource that compares funding types
Determining if you’re ready for finance
Investment readiness covers a range of factors that an organisation needs to consider before engaging a potential investor or third party provider of capital.
Some of the factors that support being ‘investment ready’ are:
- Business readiness: for example having a business plan, market assessment and product development.
- Transaction readiness: for example having a financial model, tax, legal and pitch materials.
- Having an investor engagement plan: for example having a target list of investors and doing investor outreach as well as pitching and presenting.
If you are ready to explore your options, Sustainability Victoria’s circular economy and investment facilitation service can help to discuss your individual circumstance and guide you on the most suitable options to take your project or business to the next step.
Or contact us.
Finance options that can support a circular business of project
Grants and Programs
Generally provided by government bodies or non-profit organisations, grants and programs can support specific types of projects to deliver specific outcomes aligned to policy or goals/targets.
Victoria Government:
Federal Government
Research and Development Finance
R&D Tax Incentives
The Australian Government has created an R&D tax incentive program to encourage small, medium and large companies to undertake R&D activities. The R&D tax incentive is jointly administered by the ATO and the Department of Industry, Science and Resources (DISR).
It’s important to note, before you claim the tax offset your R&D activities must be registered with DISR.
Debt Finance
Debt finance is offered by traditional lending institutions such as banks in the form of loans, credit, leases and various other products. There are an increasing number of alternative lenders, including some Venture Capital Firms which can also offer ‘Venture Debt’ along with traditional venture capital.
A good place to start for any business is with their existing bank or you can visit a financial advisor. The business.gov.au guide gives further detail into the types of debt finance.
Equity Finance
Equity is when you get money in exchange for part ownership of your business.
Equity finance come from two main sources – Private Equity and Venture Capital
Private equity and venture capital invest in varying types and sizes of companies, allocate different levels of financial commitment, and acquire differing percentages of equity in the companies they support.
Private equity: Best suited for mature companies that have an established operating history and demonstrated cash flow
Venture Capital (VC): Best suited for businesses with potential for high to rapid growth with accompanying large scale market impact, for example innovative and/or disruptive products.
There are several VC firms that have a thematic focus on the environment, climate and circular economy, or a specific sector such as Agtech. There are also family offices and high net-worth individuals who have goals around social and environmental outcomes.
To better understand if VC is suitable for you, please read the Business.Gov resource on Venture Capital.
Government Debt and Equity Finance
There are government agencies and programs that also have various forms of debt, equity and guarantees.
Victoria Government
- Venture Growth Fund
- Equity Investment Attraction Fund
- Breakthrough Victoria Fund
- Launch Vic: aimed at founders to start, grow and scale
Federal Government
Alternative Funding Forms
Crowdfunding
It's best suited for projects that can generate public support.
To better understand if this is a suitable option for you, please read the business.gov.au Crowdfunding resource.
This information is not advice. For more information, read our disclaimer.
Do you have a circular project or business that’s in need of funding?
Contact Sustainability Victoria Investment Facilitation for 1:1 guided support