Canadian government funding programs are well positioned to offset business improvement project expenses. When used strategically, these funding programs can be leveraged for many growth and investment-oriented projects. Businesses who are the most successful with funding can build a thorough funding plan that consists of programs that cover a wide range of strategic projects to optimize their funding potential, while minimizing their financial commitment.
Both federally and provincially, Canadian governments allocate money to provide small businesses with government grants, repayable funding, vouchers, and tax incentives.
These funding types are often used by businesses to extend their cash flow and execute projects at a scale and speed that they would not be able to accomplish independently.
Funding-eligible project themes typically include:
Business Expansion & Exporting
Small businesses often struggle to finance expansion activities due to limited cash flow. Achieving new efficiencies, increasing production, expanding into foreign markets, or implementing other projects require significant financial investment and are often difficult challenges for businesses. Business expansion funding is often available for the following:
- Export market entrance and expansion,
- Facility expansion or retrofits,
- Market research and competitive intelligence, and
- Adoption of advanced technologies (capital and software).
Grants and loans in the business expansion and exporting bucket can range from up to 10%–75%.
Business expansion funding is provided to established small and medium-sized enterprises with a history of financial stability. Most programs require that applicants are incorporated (either federally or provincially) for at least two or three years and remain in good financial standing prior to submitting a funding application.
Capital & Technology Adoption
Capital investment grants and loans tend to support spends that are directly attributable to improving business performance. Companies can access technology funding programs at both the federal and provincial level to offset project costs, which enables firms to purchase innovative technologies at an accelerated rate. Funding is available for:
- Large-scale productivity improvements,
- Software and advanced technology adoption,
- Financing of large capital investments, and
- Commercialization of new products and processes.
Funding is designed to improve competitiveness via automation, process creation and improvements, and innovation. SMEs need to be incorporated for at least two to three years to be considered for approval. Revenue growth is a key indicator of a project’s success, so applicants can expect to submit sales forecasts showing positive revenue growth over one to three years.
Hiring & Training
Finding and retaining top talent is critical to a business’s success. Small businesses are typically dependent on the unique skills and capabilities of its employees to succeed; however, hiring and training can be costly. Fortunately, funding is often available for the following:
- Advanced technology and software training,
- Hiring recent post-secondary graduates,
- Third-party training from certified training vendors,
- Business and educational institution collaborations, and
- In-house training to improve productivity and cross-training.
Government funding for hiring and training initiatives typically will offer business grants for up to 50%–83% of expenses.
Government funding for hiring and training requires the applicant to be incorporated within Canada. In the case of provincial funding, they must be incorporated and operating within the relevant province. Most programs do not specify minimum or maximum revenue figures, although some training grants, such as a manufacturing-specific program, require applicants to be SMEs and maintain a certain revenue threshold.
Research & Development
Innovative research projects are critical to the competitiveness of Canadian businesses. As many sectors experience new technology-based industrial revolutions, companies must invest in improved products and processes to gain an advantage. Fortunately, Canada’s federal and provincial governments are responding with funding programs to promote research and development. Funding is often available for the following:
- Product testing and certification,
- Product/process prototyping,
- Industry academic collaborative R&D,
- Software development/improvements, and
- Late-stage tech development and early-stage commercialization.
R&D programs generally provide grants and repayable funding for up to 50%–80% of eligible expenses.
Some research funding programs are tailored towards start-ups and early-stage businesses, while the majority are targeted towards established companies that are incorporated for a minimum of two years. Current revenue is a factor for most research and development funding; however, a greater focus is identifying how the research and development activity will create innovation within the industry or business.
Get Started with Government Funding for Your Business
There are a variety of government funding opportunities for Canadian SMEs looking to improve their business via any of the aforementioned activities. To stay up to date with news on the best programs available, register for our government funding newsletter today.
To learn the ins and outs of Canadian government funding and incentives, please download the Canadian Business Funding Guide.