Local Capability Fund (LCF)

Purpose and Program Overview

The Local Capability Fund (LCF) helps small to medium-sized Western Australian enterprises. It aims to improve their capability, capacity, and competitiveness. This enables them to supply goods, services, and works more effectively to the Government, major projects, and other key markets.

The LCF uplifts Western Australian businesses by providing financial support for expansion, capability building, and competitiveness enhancement. It helps businesses access greater opportunities across the public and private sectors. The fund creates jobs and contributes to a stronger Western Australian economy.

The program is structured into various rounds, each targeting different business needs. These rounds support activities such as equipment upgrades, training, accreditation, and operational improvements.

Key Grant Details

• Grant amount or funding range:
  • Supplying Key Projects Round: Up to $50,000.
  • Aboriginal Business Round: Up to $50,000.
  • Digital Transformation Round: Up to $25,000.
  • Regional Supplier Round: Up to $20,000.
  • Standards Compliance Round: Up to $20,000.
• Application open and close dates: All 2025-26 Local Capability Fund rounds opened on 25 July 2025 and close at 3 pm AWST on Thursday, 4 September 2025. The Standards Compliance Round may close earlier if funding is exhausted.
• Eligible industries or business types: Small to medium-sized enterprises (SMEs) in Western Australia. Specific rounds target certain business types (e.g., Aboriginal businesses, regional businesses). Businesses must operate in a trade-exposed industry.
• Required co-contributions: The LCF covers 50% of eligible costs (excluding GST). Businesses must contribute the remaining 50%.
• Location/state/territory applicability: Western Australia. Businesses must have their principal place of business in Western Australia and have operated there for at least three years (or 12 months for Aboriginal Business and Regional Supplier Rounds).

Priority Sectors

The LCF supports a broad range of sectors across Western Australia. Specific rounds also target particular areas:

• Supplying Key Projects Round: Focuses on SMEs supplying to projects in energy (oil, gas, renewables), mining, civil construction, defence, and marine sectors.
• Aboriginal Business Round: Supports Aboriginal-owned businesses across various sectors.
• Digital Transformation Round: Aims to help businesses adopt digital technology and data across all sectors.
• Regional Supplier Round: Focuses on SMEs located in Western Australia’s nine regions.
• Standards Compliance Round: Supports businesses seeking national and international standards certification across various industries.

Funding Scope

• Minimum and maximum amounts per stream:
  • Supplying Key Projects Round: Up to $50,000.
  • Aboriginal Business Round: Up to $50,000.
  • Digital Transformation Round: Up to $25,000.
  • Regional Supplier Round: Up to $20,000.
  • Standards Compliance Round: Up to $20,000.
• Categories or streams of funding: The LCF has distinct funding rounds, including Supplying Key Projects, Aboriginal Business, Digital Transformation, Regional Supplier, and Standards Compliance.
• Project timeline or eligible funding duration: Not explicitly stated, but activities are to be completed and claims submitted by specified dates related to the grant agreement.

Eligibility Criteria

• Business structure or size: Small to medium-sized enterprises (SMEs). Must be a for-profit organisation or business (not-for-profits and charities are generally ineligible, except for incorporated not-for-profit Aboriginal Corporations operating commercially). Must employ fewer than 200 people (at least one FTE in addition to the owner for some rounds).
• Registered business location: The principal place of business must be in Western Australia and remain there for at least 12 months following the application submission.
• Operating history: Must have been operating for at least three years in Western Australia at the time of applying (for some rounds) or 12 months (for Aboriginal Business and Regional Supplier Rounds).
• ABN/GST status: Must have an Australian Business Number (ABN) and be registered for GST for at least 12 months before applying, to maintain registration.
• Trade-exposed industry: Businesses must operate in a trade-exposed sector, meaning they face competition from national or international SMEs.
• Previous LCF funding: Previous recipients are eligible if they have complied with prior funding agreements and have received less than $200,000 in total LCF funding within the past five years (excluding COVID-19 LCF rounds).

Eligible Activities and Expenses

The Local Capability Fund supports activities aimed at improving business capability and competitiveness. Eligible activities and expenses include:

• Planning and Business Advice: Strategic and business planning, marketing plans, supply chain facilitation, tender submission advice.
• Internal Business Infrastructure and Systems: Improvements to occupational health and safety systems, quality assurance systems, manufacturing, IT, and communication systems (including cybersecurity).
• Training and Skills Development: Upskilling employees, staff development programs, and associated travel and accommodation costs if local options are unavailable.
• Plant and Equipment Investments: Purchasing new or second-hand machinery and equipment (from a dealer), modifying existing equipment, or upgrading/expanding applicant-owned business facilities. This includes specialised computer hardware and software (e.g., tender or project management software).
• Standards Compliance (for relevant round): Engaging external expertise for implementation and third-party certification of national and international standards (e.g., ISO 9001, ISO 14001, ISO 45001).

Ineligible activities include surveillance audits, ongoing accreditation maintenance costs, work by unqualified consultants, land/property acquisitions, internal R&D, and general operational expenses.

Assessment Process

The Local Capability Fund is a competitive grant program. Applications are assessed by an independent Assessment Panel, typically comprising officers from the Department of Energy and Economic Diversification (DEED) and external experts if required.

Key evaluation criteria include:

• Relevance or need: How well the project addresses an identified business need and aligns with the round’s objectives.
• Expected outcomes or impact: The measurable benefits and improvements the project will bring to the business and the broader Western Australian economy.
• Capability and capacity: The applicant’s ability to successfully carry out the proposed activities.
• Value for money: The efficiency and effectiveness of the proposed expenditure in achieving the project’s objectives.
• Financial viability and risk: The business’s financial health and ability to manage project risks.

Applicants are typically notified of outcomes within 14 weeks of the round closing. The LCF is a reimbursement scheme; businesses must pay for activities first and then claim payment.

Recent Updates of Local Capability Fund

Five new rounds of the Local Capability Fund opened on 25 July 2025 for the 2025-26 financial year. These rounds are: Supplying Key Projects, Aboriginal Business, Digital Transformation, Regional Supplier, and Standards Compliance. All rounds close on 4 September 2025, with the Standards Compliance Round closing earlier if funds are exhausted.

Application Tips

Consider these points for your application:

• Double-check all eligibility criteria for the specific round for which you are applying.
• Start early to gather all required supporting documents and competitive quotes.
• Write clearly and concisely, simplifying any technical details to appeal to a broad audience.
• Ensure your proposed project aligns with the objectives of the specific LCF round and government priorities.
• Demonstrate how your project will enhance your business’s capabilities, capacity, and competitiveness.
• Demonstrate clear and measurable outcomes and benefits.

Where to Get Help

Consider consulting with a professional grant specialist, such as Pattens Group. We offer initial assessments to review your business’s eligibility and evaluate how well your project aligns with the grant’s objectives. You can also visit relevant government websites for application templates and further guidance.