As a brave entrepreneur, you embarked on an exciting journey and started your own business. That's great news for all Canadians! People like you create most of the new jobs across the country. But what about funding to get started? Unfortunately, "no-strings-attached" grant funding is in high demand and hard to get.
The range of funding programs for small businesses is huge in Canada. Governments, agencies and local organizations offer hundreds of programs for small businesses. Those include grants, but most target specific individuals or groups.
How to get a grant to start a small business
First, you'll need to do some serious research. Be prepared by closely following local business and chamber of commerce news. Grants for businesses target specific industries, groups and regions.
They also help established companies that need funding for growth. As a result, you'll need to figure out if you qualify before sending in applications. And if you do apply, be ready to justify why you deserve grant money.
Government grants: Where to look
Provinces, large cities and regions have their small business hubs. So do private organizations and associations that support small business. Consulting services can help you find grant opportunities for a fee, but check out free resources first:
- The federal government's Grants and financing page explains funding and grant options for businesses. Go there first.
- To look for specific programs, check out Innovation Canada's "Help for your business" page. It's an extensive, Canada-wide database. It lists grant programs and hundreds of other resources and programs. You can also use a search function to find programs based on your funding amount and location.
- Some grant programs offer tied or matched funding. This means you'll need to contribute part of your funding or meet specific criteria.
- "Pure" grant programs do exist. Fondation Montreal inc.'s Grant+ program offers fifty grants of $5-30K each year to young business owners in different industries.
- Mentorworks is a private consulting firm in Ontario. It helps small businesses select government funding programs and submits their applications. See their free guide to small business funding. Consulting firms across the country can help your business.
Grant programs disguised as tax credits or employment subsidies
Other government programs offer tax credits and refunds, or incentives for training and subsidies for hiring young people. These "grants in disguise" usually require your business to have income and expenses.
For example, the federal SR&ED Tax Incentive Program is widely used by businesses that design products. It provides tax credits for investments in capital and staff.
Grant vs venture funding
If your small business designs innovative products and services, venture funding is another option. Venture funding is capital you don't have to pay back. Investors provide initial funding in exchange for a share of your company and part of future profits. Although venture capital is exciting and makes for great stories, it's also very hard to get. Venture investors target businesses with high-growth potential and large markets.
All major Canadian cities and regions host start-up competitions, like Montreal's FounderFuel. Winners get funding proposals ranging in the hundreds of thousands or even millions of dollars. They're also mentored by seasoned entrepreneurs who help them accelerate growth.
With so much information and resources available, you'll need to do your homework before you get started. Also, ask any contacts and consultants you know for advice. They can help pinpoint grants to help you start your business. Most importantly, to get funding, you'll need a great idea and a good business plan. And let's not forget hard work, preparation and patience!
