Please Note: IBGP is closed. Please consider the Business Scale-up and Productivity program for similar support.
Southern Ontario businesses have a variety of options available to assist with business expansion and growth initiatives. One of the most popular choices for small and mid-sized companies in the region is FedDev Ontario’s 0% interest small business loan, Investing in Business Growth & Productivity (IBGP). IBGP, funded by the Federal Economic Development Agency for Southern Ontario (FedDev Ontario), supports growth and innovation activities through a stream specifically for Small-and-Medium-Sized Enterprises (SMEs). By providing repayable funding contributions worth up to 25% of project expenses to a maximum of $20 million. IBGP’s SMEs stream will help to extend a business’ cash flow and provide essential project funding. If your southern Ontario business is considering projects that increase capacity, productivity, or provide access to international markets, Investing in Business Growth & Productivity may be essential to project completion and success.
The following blog contains frequently asked questions that we receive about the Investing in Business Growth & Productivity program. If you have already read Mentor Works’ IBGP overview blog, and understand the program’s eligibility criteria, these answers will help to build a more complete understanding of what’s required and how the program can help your expansion strategies.
Free Download: Compare FedDev Ontario Repayable Funding (Infographic) – Understand the similarities and differences of IBGP and IBI Ontario government loans. Extend cash flow for your innovative expansion projects with 0% interest repayable funding.
Investing in Business Growth & Productivity: Ontario Business Loans
How much could my small business receive in Ontario government funding?
IBGP repayable funding will provide up to 25% of eligible costs to a maximum $20 million for productivity-enhancing projects under the Small-and-Medium-Sized Enterprises stream. Eligible SMEs must be able to contribute the other 75% of costs through internal financing.
For example, businesses that are planning the expansion of their production capacity, innovation, and job creation may expect $4,000,000 in eligible project expenses. Based on these expenses, the business could receive up to $1,000,000 in Ontario government loans and would need to provide at least $3,000,000 in company contributions.
Which projects will Investing in Growth & Productivity provide funding for?
FedDev Ontario’s IBGP small business loans will support a variety of productivity and capacity building projects, including;
- Adaptation or adoption of new technologies, production processes, or providing skills training for these improvements;
- Supply chain and business opportunity development;
- Facility upgrades and building expansion;
- Market development and expansion; and
- Activities which support economic diversification.
Eligibility Requirements to Receive IBGP Ontario Government Loans
Is my business eligible to receive IBGP small business funding?
Companies applying for the Small-and-Mid-Sized Business stream of IBGP must meet certain criteria to become eligible for the fund. Please ensure your business is:
- Federally or provincially incorporated for a minimum of two years;
- Located in southern Ontario;
- Employing between 15 and 1000 full-time positions;
- Able to demonstrate its profitability;
- Able to document project cost estimates; and
- Able to complete the project prior to December 31, 2018.
What project costs will I be able to include for my government funding?
Costs that are directly related to project completion will be covered by up to 25% in Ontario government funding. These costs include:
- Internal labour (installing or commissioning new equipment);
- Contractors needed for their project expertise;
- Capital expenditures; and
- Non-capital costs required for project completion, such as materials.
When must my project be finished by?
Projects lasting up to three years are eligible to receive IBGP small business loans; however they must also be completed prior to the program’s expiration on December 31, 2018. Please carefully plan your project and ensure that it will be completed in advance of this date before proceeding with the government funding application.
Applying to the Investing in Business Growth & Productivity Ontario Government Funding Program
What does the IBGP application require from applicants?
Investing in Business Growth & Productivity applications are completed in two stages, which includes a statement of intent and a full application. Documents required as part these submissions include:
- Evidence of employment figures, incorporation, and southern Ontario location;
- Project cost estimates;
- Two years of financial statements;
- Comprehensive project overview and justification;
- Market outlook and strategy;
- Business plan and growth forecast; and
- Other application components as requested by FedDev Ontario.
Can I stack IBGP with other Canadian government funding programs?
Yes, stacking funds is an effective way to leverage IBGP in addition to other Canadian government grants and loans. Up to 50% of capital costs and up to 75% of non-capital costs can receive funding when stacking is used. To learn which program will stack best with IBGP, contact Mentor Works and a Government Funding Expert will identify your ideal funding path.
When can I begin my business expansion project?
Project spending can begin after formal approval from FedDev Ontario. Businesses can expect the approval process to take approximately 8-9 months, which includes program approval and agreement of project details.
When and how will I receive the funding contribution?
Payment for equipment and other expenses will be issued when it has been built, installed, and the company has taken ownership. Businesses must report these expenses in financial statements, which FedDev Ontario reviews and approves periodically. Having accurate and detailed reporting is essential to ensuring the smooth and timely release of funding.
If my application for IBGP has been rejected in the past, can I reapply?
Each Investing in Business Growth & Productivity application is reviewed based on its own merit. Please ensure your business’ eligibility and that your project is also eligible based on the specific criteria listed above. If applicants have been rejected in the past for other projects, it will not prevent them from reapplying with a new project, however the business and project must be eligible.
Post-Submission IBGP Requirements
Will I need to report project expenses and completion of deliverables?
The application’s contribution agreement (with negotiable terms) will identify what type of follow-up is required. In most circumstances, this will involve the submission of project expenses and key impacts which have resulted from the project’s completion.
When will I need to begin repaying the small business funding?
Companies are required to begin repaying their IBGP small business loan within a year of project completion. Monthly payments are based on one of two repayment timetable formats including straight-line and increasing value payments. The loan’s value can be repaid over a five year period with no interest accumulated.
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