Early Stage Businesses: Qualify for Investing in Business Innovation
FedDev Ontario’s 2014 launch of the Southern Ontario Prosperity Initiatives (SOPI) provided $530 million for small businesses to finance a variety of innovative and productivity-building projects. Investing in Business Innovation (IBI) is one of the four business-oriented programs created through the SOPI’s and aims to assist early-stage businesses to commercialize new, innovative products and processes. This repayable funding program provides up to $1 million through a 0% interest loan and can support projects up to two years in length. Businesses carrying out late-stage product development, early-stage product or process commercialization, and development of marketing or distribution strategies should consult the follow eligibility criteria for IBI to determine if this is a suitable program to leverage.
Company Eligibility for Investing in Business Innovation: Early-Stage Businesses
Investing in Business Innovation Ontario government loans can be accessed by many small and early-stage businesses, including some startups. Those able to receive 33% of eligible project expenses (up to $1 million) from IBI include businesses that are:
- Headquartered in southern Ontario;
- Less than 50 full-time employees in size;
- Incorporated federally or provincially; and
- Also secured by venture capital funding.
Projects must be backed by venture capital support worth at least 33% of project costs prior to applying for IBI. Early-stage businesses must be able to contribute the final 1/3 of project costs, demonstrating that they are in good financial standing and will be able to internally finance some components of the project.
Project Eligibility for IBI Early-Stage Small Business Loans
Up to $1 million in repayable small business funding may be provided for the following project types:
- Late-stage Product Development: Projects associated with market growth or diversification (including customer and market development);
- Early-stage Commercialization: Initiating market availability for innovative products and processes;
- Business Development: Building high-performing teams, adopting best-practices for management, improving internal processes, and improving future investment readiness. This project type must be innovative within their industry and involve technical components.
- Marketing & Distribution Strategy Development/Implementation: Preparing implementation plans to enhance success of new products or processes.
Please ensure that project timelines do not exceed a maximum of two years in length. Projects which exceed the ideal length of 18-24 months will not be able to receive these small business loans. Projects must also be completed by March 31, 2018.
Investing in Business Innovation: Early Stage Business Expenses Eligibility
Ontario small businesses are eligible to claim expenses for a variety of costs, including:
- Direct labour (funded up to 33%);
- Consultants and contractors (funded up to 33%);
- Capital costs directly related to project (funded to 25%); and
- Non-capital costs directly related to the project (funded to 33%).
Please wait until formal application approval to carry out eligible expenses or project activities. Failure to do so will make those expenses ineligible to receive Ontario government funding.
While Investing in Business Innovation can provide early-stage businesses with up to 33% of project costs, businesses can stack funding and receive up to 75% of project costs when they combine IBI with another Canadian government funding program. Want to know which programs pair well with Investing in Business Innovation for your project? Contact Mentor Works to discuss how businesses can access the most funding possible for innovative activities.
Learn More about Investing in Business Innovation Ontario Government Funding
Canadian Government Funding and Resources for Innovative Businesses
Small businesses are the main contributors towards Canadian innovation. A wide variety of tools, resources, and government funding programs are available to assist the needs of innovative companies within the country. Leading innovators should compare funding types to understand their full range of government funding options including grants, loans, and tax incentives. Ready to learn about more small business funding programs like Investing in Business Innovation? Register for a Canadian government funding webinar which explains the unique properties of many programs tailored to Canada’s largest industries. For weekly updates on Canadian business funding news, business events, and market trends, register for Mentor Works’ e-newsletter.