According to a recent report from PwC, nearly 50% of all small businesses do not leverage any government funding sources. At the same time, their research shows that access to funding is a key barrier to business growth. For many SMEs obtaining funding is out of reach for a variety of reasons – companies may not know it exists, know how to access it, or have the time to get funding proposals prepared. In this post we discuss some of the key barriers to accessing government funding.
Tax Credits Remain Popular
According to PwC’s report, tax credits such as the popular SR&ED credit program are the best utilized government program with 36% of businesses including SR&ED claims with their tax filings. Beyond this, 48% of Canadian small businesses do not take advantage of any government funding, such as grants, vouchers, and repayable funding. However, the most popular government funding program is still the Industry Research Assistance Program (IRAP). This highlights the fact that many businesses are aware of R&D focused incentives.
Lack of Expertise Key Reason
PwC contends that lack of internal resources and knowledge is one of the main reasons businesses don’t leverage existing funds:
“Admittedly, it does take work to access government funding…Gaining government funding requires an effort much like that needed to secure private funding: firms need to develop their networks within agencies and funding bodies, build key relationships and deliver a compelling, persuasive argument for why their idea and business deserves government support.”
Building these networks, and understanding how to pitch your project takes time and expertise. One of the other main issues is that businesses do not know what is available for their business. There are many Canadian government funding programs available, each with their own nuances, unique eligibility criteria, and proposal requirements. In 2014 alone, Mentor Works helped Canadian businesses receive over $240M in government grants, loans, and incentives.
Project-Based Government Funding is Available
In our experience, the best way for a small business to leverage government funding is through project-based funding. Programs are available that support training projects, equipment implementation, and general expansion projects. We help our clients understand what programs are out to support their existing priorities, this helps to align businesses’ goals with existing incentive programs.
If you are interested in learning about what funding programs are available you can contact us now to schedule a complimentary funding consultation. If you want to learn more about Mentor Works and what we do, take a look at the Mentor Works Advantage infographic to see how we help our clients find and obtain Canadian Government funding.