The Southern Ontario Fund for Investment in Innovation (SOFII) is a $20M program funded through FedDev Ontario as a part of their FedDev Prosperity Initiative. This Ontario government funding program is divided into two regional areas with involvement from the Community Futures Development Corporations (CFDC). This government funding for business program is based on a quasi-mezzanine model for project based funding and is well-suited for instances when Angels and VC’s are waiting for early revenues to build.
SOFII Funding for Small Business Details
SOFII government funding Ontario for small and medium-sized businesses supports investment in innovation through low-interest loans. The minimum loan size is $150,000 while the maximum is set at $500,000. Additional SOFII small business loans Ontario Information:
- The rate will be dependent on the risk profile with 8-12% interest rate and potentially lower.
- 10 year amortization, 4-10 year term loan agreements
- May allow up to 6 months of interest payments at the beginning of the loan, depending on model
- The loan committee will determine the amount of risk
Company Eligibility for SOFII Ontario Government funding for Business
Approval for SOFII low-interest small business loans will depend on both equity and the personal strengths of the individual management team in question. Additional Eligibility Criteria is as follows:
- Must demonstrate need to have growth, that is not being facilitated by current lending institution
- For every $1 SOFII puts in, there should be a contribution of at least $0.50 from the company
For example: Companies asking for $300k loan need to have at least $150k – This does not necessarily have to be cash but may also include:
- Own equity
- Internal cash flow
- Other lenders
- capital already invested
Projects Eligible for SOFII Ontario Government Funding
These repayable small business loans Ontario are intended to help finance:
- Late stage commercialization;
- New product or service development (i.e. Technical Demonstration & Piloting);
- New applications or markets; or
- Development or implementation of new processes or technologies
- Development of Sales Channel and Partners
- User Documentation and Training
- Conferences (i.e. Regulatory)
- Limited Trade shows and Market Research/Competitive Analysis
- Software Tools for Promotion
Industry Sectors Eligible for Ontario Government Funding:
Industry sectors eligible for SOFII government funding for small business includes: Pharmaceuticals, telecommunications, health biotech, new materials, information technology, medical equipment and software. Qualified innovative projects must demonstrate growth needs and create job opportunities in the region. Projects must be in the implementation or late-development stage. Businesses under threat may be eligible and will be assessed accordingly.
SOFII Loans for Small Business in Ontario Application Process
The application process for SOFII small business loans includes three steps:
- Must present a strong executive summary
- Evaluation based on project-funding
This part of the process can be instantaneous or take 1-2 weeks.
2. Pre-Qualification process:
The pre-qualification process (step 2) is key to a successful application
- Application is received by the regional advisory committee
- Must address the program correctly – job creation (i.e. >30% of current payroll)
- Submit, upload documents & additional documents onto the secure web system
- Regional advisors reviews the pre-qualify application
- Applicants will typically receive a response within 15 days
3. Loan Application Process:
- Cash flow planning, business plan, describe the impact of the project
- Turn around
This part of the process could take up to 30-90 days – depending on detail of information supplied.
Looking for More Information on SOFII Small Business Loans Ontario?
Contact a Canadian Government Funding Planner for more information on this program as well as other Canadian small business grants and loans available for your business.