The main reason the Australian government would turn someone down for small business start up grants would be an applicant not being eligible for the program applied to. Also, the applicant did not prepare properly or sufficiently, and the Australian government subsequently did not approve the application for small business start up grants.
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You can also take advantage of the Small Business Startup Assessment Tool below and see the tools and resources you need to succeed at launching your business. It takes just a minute and will also tell you if there may be any funding programs available.