Understanding the Benefits of the SOFII & Futurpreneur Programs for Business Loans

Finding government funding support through grants and small business loans in Canada can be tricky at times. However, there are a few saving-grace loan programs that offer support to Canadian organizations to help grow the Canadian economy from the ground up. Two of these initiatives, Futurpreneur Canada and the Southern Ontario Fund for Investment in Innovation (SOFII), allow opportunities for Canadian organizations to access funding for scaling-up their businesses.

Futurpreneur Canada

The Futurpreneur initiative is a Canadian organization that provides collateral-free loans to Canadian businesses at interest rates that offer more favorable rates than most other banking institutions in the country. Futurpreneur has also partnered with Business Development Canada (BDC) to improve the amounts and terms of their offers.

Funding Amount

Successful applicants may be capable of receiving up to $20,000 through Futurpreneur and up to $40,000 via BDC, for a maximum total of $60,000 per business. The following terms may apply to each loan allotment:

Futurpreneur:

• A maximum loan of $20,000 CAD, given with a five-year term;
• Interest will be charged at CIBC’s prime rate + 3.00%;
• The first year will be interest-only payments; and
• A one-time loan management fee of 1% of the total loan amount is charged at the time of disbursement.

BDC:

• A maximum loan of $40,000 in financing;
• The first year will be interest-only payments;
• Interest will be charged at BDC’s Floating Base Rate* + 1.65%; and
• Once a year (non-cumulative) on the anniversary date of the loan authorization date, you may repay 15% of the principal outstanding without indemnity.

To see a comprehensive review of the loan criteria, please visit the Futurpreneur program page.

Applicant Eligibility

To be eligible for funding through these loan programs, applicants must meet the following minimum requirements:

• Applicants must be located in Canada;
• Applicants must be between the ages of 18–39 years old; and
• Applicants must have a viable business plan.

Southern Ontario Fund for Investment in Innovation (SOFII)

The Southern Ontario Fund for Investment in Innovation (SOFII) loan program is a long-term program that is self-sustaining, which means funding that is repaid by borrowers is re-distributed to other applicants in a circular system. SOFII offers repayable funding to Ontario-based small and medium-sized enterprises (SMEs) that offer innovative products or services and are looking to scale-up.

This program’s funding is ideal for covering the costs associated with scaling-up without assuming a high amount of risk that can often be found in traditional loan situations. Read our comprehensive review of the application process to learn how to qualify for SOFII small business loans in Ontario.

Funding Amount

Successful applicants for the SOFII program may be eligible for repayable funding from $150,000–$500,000. Loans that are administered through the SOFII program are often delegated at an interest rate varying from 8%–12%.

Eligible Applicants

To be eligible for the SOFII small business loan program, organizations must meet the following application requirements:

• Businesses must be located in Southern Ontario;
• Businesses must have a minimum of 50 employees and a maximum of 500 employees; and
• Businesses must be able to repay the Ontario government loans with a comprehensive plan to do so.

Eligible Activities

Companies that are interested in using this government funding program to improve their organizations must provide a detailed outline of what they plan to do with their loan. Eligible business activities through this program will reflect the following options:

• Efforts for late-stage commercialization of a product of a service;
• Investing in developing a new product or service;
• Efforts to develop or implement new processes or technologies in their organization; or
• Costs associated with bringing new applications to markets.

Deadline to Apply

The Southern Ontario Fund for Investment in Innovation is a cyclical program that operates on self-sustaining loan provisions and therefore funding is dependent on other organizations repaying their allotments. This program is currently open and accepting applications.

More Government Funding Opportunities with Mentor Works

Government funding opportunities often offer strong opportunities for businesses to grow and improve their businesses through business expansion, hiring & training, research & development, and capital & technology adoption. To see which government funding initiatives are available for each of these categories, visit our comprehensive government funding directory.

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