Mentor Works focuses on government funding and provides a comprehensive, knowledge-based approach to help you find the resources to grow your business. Below are answers to some of the more common questions to help you better understand how Canadian government funding, grants, and repayable loans work.
Both the provincial and federal governments offer different kinds of funding programs and services to support small business – through initiatives such as The Economic Action Plan.
Unfortunately, government information is not consolidated on any one website. We know where to find this information and have access to the hundreds of programs that are available. Please refer to our Canadian Government Funding Blog for more information on the various small business funding grants and low interest repayable loans available to Canadian businesses.
Some programs also have restrictions on the number of people on payroll, requiring a minimum of 5, 15 or 50 employees. Other programs have revenue limits of under $500k.
Some funding is offered to not-for-profit and for-profit companies. Review each grant’s eligibility factors in our Government Funding section. Also, each program is reviewed online or during the invitation process.
To be awarded government funds, a business’s financial health is important. Generally, a current balance sheet and income statement must be submitted with the application. At minimum, some financial information will be required, such as a letter from your financial officer.
Many of the repayable loans and larger development grant programs may require a business plan. In most cases, a template for a business plan or strategic plan is available for download to support the process.
There are also significant Internet resources to support the planning components.
With the new development of The Economic Action Plan and FedDev Ontario, there are many programs that support the Southern Ontario Advantage.
The process for tax credits is significantly different. It is often more complex and time consuming to pursue these credits compared to the typical $50k government contribution mechanisms that have been identified.
As well, business owners are entitled to SR&ED tax credits once per year. As such, no immediate or regular cash flow improvements are gained.
SR&ED tax credits are considered entitlements; government funding programs are not.
The greatest number of grants and repayable loans focus on business expansion. Non-repayable grants of $50k are a great place to start, but there are also larger strategic funds for capital equipment, global expansion and access to new markets.
Many government programs, whether federal or provincial, focus on creating highly skilled jobs and increasing long-term employment opportunities.
Consider business expansion funding if you can add jobs, and achieve viable and sustainable growth.
As long as expansion plans ensure jobs are maintained at a Canadian-based operation, the financing options to expand our significant. Consider Going Global, EMA and new Ontario Advantage programs to name a few.
Yes and no. Generally you need to be incorporated for at least two years to apply for non-repayable funds. But there is a considerable amount of funding to support activities such as product and process applied research; engineering design; technology acceleration; product testing; certification; marketing studies; proof of concept; piloting and demonstration; problem solving; and pre-commercialization activities.
You can focus on groups like MaRS that provide market research studies and business project support from local universities and colleges.
Regional innovation centres are another good source for provincial and federal funds. They also provide great business planning tools to help you determine the right strategies for growth.
Many of these programs require that graduates come from Southern Ontario post-secondary institutions and have graduated in the last five years. Some have age requirements as well – most often under 31 years.
Some hiring initiatives will specify or provide incentives for hiring from certain programs (i.e., science, engineering or math, and marketing).
Many government supported programs require that you find your graduate before applying. This is not optional – it is part of the process.
No. Funding programs currently support many different areas of business: from research and development to capital investment to business expansion and human resources. Training, lean manufacturing & design, IT best practices, and energy efficiencies are common activities that receive funding.
That’s not to say the government doesn’t recognize the importance of R&D in terms of our economy. Keeping talent in Canada is dependent on collaboration and partnerships with innovative businesses and R&D facilities at our post-secondary institutions.
Some government mechanisms address the business challenges around commercialization. The Ontario Centres of Excellence and other training and marketing programs can help provide information and support.
Initiatives tend to be sorted by pre-commercialization and commercialization eligibility factors. Sustainable Development Technology Canada (SDTC) and larger programs like Innovation Demonstration Fund (IDF) are great programs to start with, depending on your sector.
Not great news. I would assume that the same way banks evaluate risk, the government follows suit. The government likely sees retail as higher risk, so funding is limited in this case. But don’t give up – even diligent effort can discover $50k per year to support growth.
Focus on regional centres like CFDC and Small Business Centres as well.
The majority of government business funding does require that you complete some product design, development or research work at a Canadian-based operation.
Read up on the eligibility factors found on government and program websites. For instance, some programs will deem software development companies or marketing companies to be eligible for manufacturer programs. The decision is based on the amount of product design and development completed on-site.
Dependent on the objectives of the funding program, this could be a significant factor in the approval process. Usually this is related to larger programs that establish a repayable loan with at least 50% support from the business.
Review the eligibility factors and objectives of the programs first. Then determine your financing and business plans for the next 12 to 24 months, and select the government programs that suit those needs.
You should also understand the funding cycle – when funds are available – and build this into your business model.
With so many programs available, you can rate and select the one that is best for your business. Think in terms of problem, technical challenge or uncertainty, proposed solution, expected outcome and duration when evaluating the best projects.
You should also review the reporting process for each program. Examine what reports will need to be managed and completed during the life of the project.
You should carefully research this information to set clear expectations, and to ensure that you carry out the correct activities for the specific funding program – so there are no additional delays.
Before you apply, be sure to carefully review the objectives of the funding program. It you can’t fully meet the requirements, move on to the next program. When you find a program where you can match all the criteria, your success rate will be much higher.
Yes, but tracking methods vary. Some programs require reports each month, some at pre-established milestone dates and some at the end of the program only, where results have to be documented. Progress tracking is often related to how the money is dispersed.