Mentor Works gets several calls a day from entrepreneurs and aspiring small business owners on how to get started. Their questions vary, but each one is looking to orient themselves in this space and find out what sort of government backed programs exist to support them.
I have had the pleasure of working in this space for some time, and completed significant research on the programming that exists and the infrastructure that is out there to support new businesses. It’s a tough space, and the availability of information on the world wide web has not made navigation any easier for those who want to access small business grants and loans.
I’m hoping this article provides some clarity on this space for those of you who are just starting out.
Who will assist my Ontario small business/startup?
The province of Ontario has invested in three key organizations to support new entrepreneurs and small businesses. These services are largely free of cost and we highly recommend you contact them and get connected to their services if you are looking to start a new business:
Small Business Enterprise Centres
The Small Business Enterprise Centres (SBECs) are local, community organizations funded by the province to support businesses. This is my first recommended stop when looking to start a business. While they vary from office to office, you will usually be able to find out about the following:
- Tools to explore entrepreneurship and self-employment, as well as examine business feasibility;
- Assistance with the development of a business plan, market research, financial and cash flow development, taxes, and insurance;
- Access to advisors who have owned and businesses, as well as networking opportunities; and
- Youth entrepreneurship funds, including grants and loans through programs such as Starter Company, pitch competitions such as Make Your Pitch, or grant programs such as Summer Company.
Ontario Network of Entrepreneurs
The Ontario Network of Entrepreneurs (ONE) is a collaborative network of regional innovation centres. These are local community organizations focused on technology or innovation businesses, although they also have networking events and services that can be used by businesses from a variety of backgrounds. By entering your postal code, you can find the closest organization to you. Services include:
- Access to Entrepreneurs-in-Residence (EIR) to mentor you and assess the commercial viability of your ideas, products, and services;
- Access to incubator space or shared resources for start-ups and early stage companies (in some cases);
- Navigation of funding sources such as angel investment and venture capital;
- Connection to post-secondary researchers or tools to advance your technology; and
- Access to funding for start-ups such as the Ontario SmartStart Seed Fund require you to have involvement with and advice from your local regional innovation centre.
Employment Ontario offices are local organizations focused on helping individuals find apprenticeships, employment, training, or help employers find new staff. This is also a major topic we receive phone calls about; how to find apprenticeships or train for a new work skill. If you are looking to get back to work or start a new career, your local office is the best place to start.
Canadian Government Support for Small Business
In addition to provincial resources, the federal government has invested in local small business tools via the Community Futures Development Corporations (CFDCs) who have offices across Canada. You won’t find one of these in urban areas, the mandate of these organizations is to support small business in rural regions with the following services:
Representatives from CFDCs can help you determine your business priorities and create a plan to achieve them through:
- Business plan development;
- Training; and
- Export development support.
All local CFDCs manage a pool of loan money that can be applied for by local entrepreneurs or existing businesses. This is not a grant, the funds are flexible commercial financing that can be provided at up to $150,000. The applications are reviewed by a local board of directors and generally CFDCs will consider higher risk investments such as first-time entrepreneurs. The terms and structure of the loans can vary and it is best to contact your local CFDC to find out more.
Most of the funds targeted at new or recently established businesses are in the form of loans. Other key agencies to investigate when starting out include:
- Business Development Bank of Canada (BDC) who offers a variety of loan products for new and existing businesses. If you are interested in applying for this Canadian government funding resource, you are encouraged to contact your local BDC Business Centre.
- Futurpreneur Canada focuses exclusively on youth entrepreneurs (18-39) who are seeking financing for their business (existing or new).
Beyond these two agencies, the federal government has also created the Canadian Small Business Financing Act (CSBFA) which is a government backed loan valued up to $500,000 for equipment, property, building purchases. The loan is subject to interest, either variable or fixed. For a variable rate, the maximum chargeable is the lender’s prime lending rate plus 3%. For a fixed rate, the maximum chargeable is the lenders’ single family residential mortgage rate plus 3%. This program is typically administered by your local bank.
Canadian Small Business Funding and Resources
As you can see, there are a lot of resources to assist with early stage companies. If you are just getting started, we recommend you work with these local agencies until you are ready to start hiring and extending your workforce, then it is time to connect with Mentor Works to understand how to offset the costs of hiring and training your team. We recommend one of our upcoming webinars to help you get oriented!