Boosting Female Founders cohort announced before agreements were finalised
The latest Boosting Female Founders recipients were recently announced before all agreements had been finalised and signed.
Earlier this month, the latest recipients of the Boosting Female Founders (BFF) grant were made public. Thirty-four women-led businesses will now share a portion of $11.6 million — a boon for their companies and efforts to diversify the sector.
However, this quiet announcement was made before all agreements had been finalised and signed. Some founders were also told they could start executing on their designated BFF projects despite the lack of signed contracts and clarity on exactly when the grant money would be paid.
What ensued was two months of uncertainty.
Delays are commonplace for Round 3 of Boosting Female Founders
The third round of the Boosting Female Founders program is one that has been plagued with delays.
Opening in May 2022, expressions of interest (EOI) in the program were earmarked to conclude in October of the same year. Shortlisted applicants would move to the next round, and the grants themselves were initially expected to flow to recipients from February 2023.
Instead, the BFF program experienced consistent setbacks throughout 2023. Applicants were told in late 2022 that Round 3 had been delayed, and this was pushed back further due to the Federal Government Spending Audit, which looked into pledges made by the Morrison government.
“Applications for stage two of Round 3 opened on 20 June, 2023, and closed on 20 July, 2023. The department is now undertaking the final stages of that selection process, with the outcomes expected to be announced by government shortly,” a spokesperson for the Department of Industry, Science and Resources (DISR) said in an email to SmartCompany in November 2023.
In an email to applicants seen by SmartCompany at the time, business owners were informed that final approval and contract negotiations would happen in December 2023 to early January 2024.
Successful Boosting Female Founders confirmation, more waiting
Recipients of Round 3 of BFF were informed of their success on December 12, 2023. From there, contract negotiations commenced, with an aim to execute in mid-January.
Considering the amount of time that had passed since Round 3 had opened and recipients were chosen, this is sensible. BFF is a project-based grant, and 18 months is a long time. Plenty of things can change for a small business across that period of time.
In correspondence seen by SmartCompany, the department appeared to be conducting due diligence across the projects before executing the final projects for signing.
This is the same process that occurred in Round 2 of BFF, which was run by the Morrison government. According to some successful recipients, they were notified in November 2021, followed by a public announcement in February 2022.
The key difference is that according to sources, in Round 2, contracts were signed before that public announcement. That was not the case for all applicants for Round 3 of BFF.
While researching this story across February 2024, SmartCompany spoke with multiple successful applicants from Round 3. All were either yet to receive or sign a finalised agreement when their success in securing a grant was made public on February 7.
SmartCompany is not suggesting that all 34 successful applicants are in the same situation.
The money problem
While it appears strange to announce the recipients of large grants before contracts have been finalised or signed, there was also the problem of the money itself.
Many founders who have been involved in the BFF program, both past and present, have said the grant money has provided a lifeline for their small businesses. Without it, they would not have made it.
But equally, as we have previously reported, the repeated delays in Round 3 of the program have endangered a number of women-led small businesses.
This includes those who were sitting on matched funding during the two stages of decision-making.
“We had the matched funding. We were ready to go. We had planned for it to be organised in October last year – that was the deadline,” a source told SmartCompany under the condition of anonymity back in November.
“And then they put it off for six months and didn’t announce it. And by then we’d fallen below our expected runway and couldn’t match it anymore – certainly not at the $400-something [thousand] that we were going for.”
For some, the wait only ended in February 2024.
“Successful grant applicants were notified in December 2023 and had since been in negotiation with the Department ahead of any public announcement,” a spokesperson for DISR said in an email to SmartCompany.
“Unsuccessful grant applicants were notified of the outcome on 7 February, 2024.”
According to the spokesperson, this was the same day that the grant offers were published on business.gov.au. This was just shy of two months after successful recipients were informed.
There are also issues for some successful recipients.
It is SmartCompany’s understanding that grant recipients receive an initial payment upfront — a portion of the overall total of the grant — upon successful execution of the agreements.
However, multiple sources speaking to SmartCompany on condition of anonymity claim to have been informed by the Department that they could start executing on their BFF projects back in December — before the grant agreements had been signed.
It’s worth noting that in emails sent to successful applicants did state: “It is important that you do not incur any costs prior to the project start date, this would make the cost ineligible. This includes placing orders, paying deposits or buying any items”.
The grant agreements, seen by SmartCompany, also reflect this:
“We cannot make any grant payments until we execute the grant agreement with you. ‘Execute’ means both you and the Commonwealth Government accept the grant agreement. You will be responsible for any expenses incurred until we execute the grant agreement.”
“I could go bust over this”
This perhaps wouldn’t have been a problem if the mid-January timeline had stuck. However, due to delays in finalising the agreements, as well as the public announcement, the initial payments didn’t arrive.
Unfortunately, some recipients were relying on this deadline to cover the costs of executing on the first stage of their BFF project.
What ensued was months of stress and fear regarding how this could affect the reputation and survival of the businesses.
“To have a small business is petrifying enough without the strain of this,” one source said to SmartCompany earlier this month.
“I could go bust over this. What do I do if I can’t pay my bills?”
According to the DISR, project start dates and eligible expenditure differ between individual grant agreements.
SmartCompany understands that, at the time of publication, some of the funding has been rolled out, while other agreements were still being finalised.
Sources have also alleged that some funding agreements are being backdated. This means costs incurred during the subsequent time period will be eligible to be covered by the grant funding.
DISR would not confirm this, however, the spokesperson did say that “some recipients have already received their initial payments”.
Do you know more about Round 3 of the BFF program? Get in touch with us at news@smartcompany.com.au.
